France pulls in €18 billion through fighting tax fraudsters

The French government added a staggering €17.9 billion to its public coffers in 2017 thanks to measures aimed at stamping out tax fraud and evasion.

France pulls in €18 billion through fighting tax fraudsters
Photo: AFP

France continues to claw back billions of euros owed by French tax fraudsters.

According to an annual report by the country’s General Directorate of Public Finance (DGFIP), adjustments to the tax system resulted in €17.9 billion in tax money recovered in 2017.

That represents a decrease of € 1.6 billion compared to 2016, when € 19.5 billion was retrieved, and €3.3 billion less than 2015, when a record €21.2 billion was recuperated.

But these figures still showcase the success of the Ministry of Finance’s so-called 'drunk tank', a scheme that allows people with hidden bank accounts overseas to legalise their tax situation and only face light penalties.

Many French citizens with offshore accounts and other tax-evading schemes have chosen this option over facing more severe penalties from authorities in due course.

This one measure was alone responsible for €2.5 billion retrieved in 2016 and more than €1.3 billion in 2017, Le Parisien reported.

However, the French taxman’s hunt for scammers is far from over.

Fifty senior officials at the Ministry of Finance in Bercy are on a constant lookout for fraudsters who are trying to hide their tracks and money offshore and/or profit from lucrative tax arrangements.

If caught, defrauders face five years behind bars and half a million euros in penalties.

Bercy also recovered €11.1 billion in 2016 and €9.4 billion in 2017 in old tax revenue owed to them by tax evaders after legal disputes.

And even though the amount recovered from tax fraud dropped in 2017, France’s overall tax earnings increased from €594 billion to €601 billion.

As for income tax, the annual amount recovered also rose from €76.5 billion in 2016 to €77.6 in 2017.

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Reader Question: Why did my French electricity bill increase by more than 4%?

The French government has capped electricity prices rises at four percent - but as with many French rules, there are certain exceptions.

Reader Question: Why did my French electricity bill increase by more than 4%?

Question: I read in the media that electricity prices in France are capped at four percent, but I just got a letter from EDF telling me that my bill is going up by almost 20 percent – is this a mistake?

The French government’s bouclier tarifaire (tariff shield), froze gas prices at 2021 levels and capped electricity price hikes to four percent – it remain in place until at least the end of 2022.

However, there are some customers who will see increases to their bills of more than that – here’s why: 

The regulated tariff rate

The French government involvement in price-setting doesn’t just happen during periods of energy crisis, normally regulated tariff prices are updated twice a year: usually on February 1st and August 1st.

Typically, this value is calculated by the CRE (commission de régulation de l’énergie) and it is based on several different factors, which are explained on this government website. These tariffs proposed by the CRE are then subject to approval by the ministers in charge of energy and the economy.

READ MORE: EXPLAINED: Why are French energy prices capped?

These affect the state-owned Engie (formerly Gaz de France), the mostly state-owned EDF and some local distribution companies. Around 70 percent of people in France get their electricity from EDF but other suppliers do exist in the market.

These alternative suppliers, like Direct-Énergie, Total Spring or Antargaz, are free to charge more – but don’t usually charge much above the EDF rates for obvious commercial reasons.

Basic rate

The government-set limit in price rises refers only to the basic rate (option base) for electricity.

This plan represents over 80 percent of the 32 million households connected to the electricity grid in France. So, there is a good chance you might be subscribed to this without even realising it. 

If you are on the basic tariff rate, your bill will not increase by more than four percent this year.

Other tariff options

However, other options for electricity bills do exist, including off-peak rates, green deals and fixed energy prices for a certain period.

Typically people who sign up for these will have been paying less for their electricity in the preceding months than those on the base rate.

However, there are certain special deals that are not covered by the four percent cap, and some users will find that their deal period has come to an end, they are then shifted onto the base rate – which is likely to represent a price increase for them of more than four percent.

It’s little consolation when faced with rising bills, but you will likely have been paying significantly less than customers who have been in the base rate for the past few years.

READ MORE: French government to continue energy price freeze until at least 2023

Kilowatt price

Because most electricity price plans are bafflingly complicated, the easiest way to compare is to look at the price per kilowatt-hour.

Your electricity bill consists of a fixed part, the monthly subscription (abonnement) and the variable part, which depends on the quantity of electricity consumed (in euro per kilowatt-hour, kWh). The latter part is what is concerned by the tariff shield of four percent.

Here is an example of what that might look like:

The mid-August base rate price per kilowatt-hour is €0.1740/ kWh, so if you’re with EDF they cannot charge you more than this rate.

Other EDF plans charge significantly less than that – for example the Vert Electrique Weekend deal has been charging €0.1080/kWh on weekends and €0.1434/kWh on weekdays. 

Bill rises

With the tariff shield, the average resident customer on the base rate will see a €38 rise on their bill this year, while professional customers will see an average of €60 rise. 

Without the tariff shield, electricity prices per residential (non-business) customer would likely have increased an average of €330 a year, according to the CRE.