France’s rate cuts for business and individual income taxes in seven years of the Macron presidency have powered increases in tax revenues and jobs, the country’s economy minister, Bruno Le Maire, said Tuesday.
With the country’s corporate tax rate at 33.3% seven years ago, France took in 35 billion euros ($38 billion) in corporate taxes. That had climbed to 60 billion euros after the Macron government completed a gradual reduction of the rate to 25% in 2023, Le Maire said.
“Cutting taxes is good for everyone. It’s good for you and it’s not bad for me either,” Le Maire told an annual gathering of entrepreneurs held by business federation MEDEF at the Longchamp hippodrome in Paris’ Bois de Boulogne.
Le Maire said cuts in personal income tax rates had produced even bigger results in his seven years as minister. With business activity and jobs boosted, more people working paid more in personal income tax. Personal income revenues have doubled from 70 billion euros to 140 billion euros in that time, he said.
As Le Maire touted tax cuts, he’s also made clear the government has a big revenue gap to close. The government has recently said it plans to hike levies on air travel, and it wants to tax the profits of toll road operators. French home owners have seen their locally assessed property taxes soar this year, although so-called taxe d’habitation residence taxes have been eliminated for primary residences.
At the MEDEF meeting, Le Maire and Prime Minister Elisabeth Borne have tried to reassure business leaders that the government intends to keep its promise to eliminate a key production tax, but they say it must first close the budget shortfall.
Le Maire said the government lowered production taxes on business by 10 billion euros in President Emanuel Macron’s first five-year term.
Earlier this year, the 2023 budget law halved the cotisation sur la valeur ajoutee des entreprises, which is known by its French acronym, CVAE. The tax was slated to be eliminated entirely in 2024, but the government has now confirmed that it will cut the tax by 1 billion next year and eliminate it entirely by the end of Macron’s term.
“If we can definitively eliminate the CVAE sooner than that, we will do it, without hesitation, Le Maire said.
