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France to free 1.8m households from taxes

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France to free 1.8m households from taxes
French PM announces that 1.8 million households will be freed from income tax. Photo: Joel Saget/AFP
09:55 CEST+02:00
The French Prime Minister Manuel Valls announced on Friday that the government will move to help out the country's most hard-up tax payers by exempting 1.8 million households from income tax.

There was good news for hundreds of thousands of France’s most longsuffering tax payers on Friday.

The French Prime Minister Manuel Valls announced that the government would take steps to ease the fiscal burden on the country’s most hard-up by exempting 1.8 million households from paying income tax on their 2013 earnings. 

"We need to lower taxes in our country to restore purchasing power to our citizens, to the working classes as the middle class," Valls told Europe1 radio.

“The measure that we are going to take will permit 1.8 million households to be free from paying income tax,” he added. The PM had initally suggested 650,000 households would benefit, but said the government had decided to strengthen the measure to demonstrate its "commitment".

The PM said the measure will concern the taxes to be paid in September 2014 on income earned in the year 2013. The PM did not commit to introducing a similar measure for 2014 or 2015. The tax cut, which will cost the state around €1 billion,  will be included in the finance bill to be put before parliament in June.

As well as the 1.8 million households that will be exempt from paying income taxes a further 1.2 million lower income households will see their annual bills cut, Valls promised.

The Socialist government has been under pressure to cut taxes for France’s lower classes, who have been most affected by ongoing economic gloom and record high unemployment.

President François Hollande’s popularity is at a record low for any French head of state as traditional Socialist party voters turn their backs on him.

Adding some details to his promise Valls said the tax ememption will benefit single people earning around the minimum wage of €14,000 a year, or couples with two children who have a combined monthly salary of around €3,600. According to the figures released by the Prime Minister's office the exemption will save those single people  €300 on the annual tax bill and couple €750 euros.

Valls is confident the measure will help improve the lot of the country’s most in need. Coming just nine days before the European elections, the measure could be seen as electioneering on the part of a Socialist party heading for another disastrous poll result, following the recent local elections debacle.

The PM rejected this accusation.

“For five years, our citizens have been subject to tax hikes. It’s too much,” Valls said. “This is not just a gesture, this is a strategic measure to give back some purchasing power to our compatriots.”

In France income taxes are paid by households rather than individuals, although other ‘taxes’ known as social charges are deducted from individual salaries and bring in more money to state coffers.

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