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France has 'third highest tax burden in EU'

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France has 'third highest tax burden in EU'
France's tax burden in terms of a percentage of its GDP is on the increase and is one of the highest in Europe. Photo: AFP
18:19 CEST+02:00
France is synonymous with taxes and a new report released on Monday has revealed that France's tax burden is now in the top three in Europe when compared to the percentage of its GDP.

New stats revealed that the ratio of France’s tax burden when compared to its GDP continues to grow and is now among the top three in Europe.

The ratio of tax revenues to GDP varies greatly among member states of the EU but in France it stood at 45 percent in 2012, a report from Eurostat, the statistical office of the European Union has revealed.

That ratio put it ahead of Scandinavian countries like Sweden (44.2 percent) and Norway (42.4 percent) both of which are renowned for their high taxes.

Only Denmark (48.1 percent) and Belgium (45.4 percent) have a higher tax-to-GDP ratio than France.

Across the EU, the overall sum of taxes as a percentage of GDP reached 39.4 percent in 2012, although it was 40.4 percent in the 18 countries using the euro currency.

The increase in France's tax-to-GDP ratio (from 43.7 percent to 45. Percent) was in stark contrast to the UK where the ratio fell from 33.2 percent to 32.4 percent.

Those figures may not surprise anyone who has been reading the French news in recent years. When socialist president François Hollande was elected in 2012, he immediately set about raising taxes at the same time the country’s beleaguered economy stuttered in an out of recession.

However, despite the furor over Hollande’s plan to levy a 75 percent tax rate on the rich and France’s long standing reputation for having a hungry taxman, when it comes to levies on labour, Eurostat’s figures may surprise a few.

While France, like most EU countries, raises most of its revenue through labour levies, the percentage it makes up of the total tax revenue is less than in other countries.

For France, 52.3 percent of its the overall tax revenue came from labour taxes – the same as in 2012 – in Sweden the equivalent figure was 58.6 percent, in Germany it was 56.6 percent and in Belgium it was 53.9 percent.

The Netherlands (57.5 percent) and Austria (57.4 percent) also raised more money of their overall revenue through labour taxes than France did.

The French have long accepted the principle of paying high taxes in return for top quality public services but with a recent poll revealing more than seven out of ten French tax payers are of the view they are being hit too hard in the pocket, perhaps the traditional view is changing.

In an analysis article last year titled "Why do the French Tolerate Such high Taxes", The Economist magazine suggested "the social contract", between the French and the state, "could be on the verge of breaking down".

Earlier this year the French government appeared to respond to those fears when PM Manuel Valls announced that taxes would be cut for 1.8million of the country’s poorest households.

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