Is France set to postpone its flagship income tax reform… again?

Is France set to postpone its flagship income tax reform... again?
Photo: AFP
A major reform is set to come into force from January next year that will see all workers have their income tax automatically deducted each month, but President Emmanuel Macron suggested on Thursday the landmark change could be postponed once again and perhaps even scrapped altogether.

The major reform that was announced by the previous government under former President François Hollande was finally set to come into force in January 2019 after years of promises, talks and delays.

The change would see most workers in France have their income tax automatically taken out of their wages each month, as is the case in most other European countries, rather than the current system which sees employees pay income tax the following year.

The reform, which President Emmanuel Macron backed, was due to be implemented in January 2018 but was delayed a year because the new government wanted time to make sure the reform was actually worth it and to smooth out any problems.

But speculation has grown in recent days that the change may be put back once again just as more opposition voices have spoken up urging the president to scrap the plan altogether.

On Thursday Macron announced that he wanted some “precise responses” before deciding once and for all if  the change to income tax payments would be brought in in January.

“I have the intention to push this reform through on time but I have asked the relevant ministers to answer all the questions that still arise before giving a final directive,” said Macron.

“I need a series of very precise answers and to be sure of what our citizens will go through when this reform is introduced,” he added.

“It's normal that we make sure that all the details are clear. I want to see in detail what it means for each citizen.”

According to French newspaper Le Canard Enchainé Macron is ready to postpone a reform that would impact France's 38 million tax paying households.

The paper claimed the president will decide before September 15th whether to push ahead or delay it again.

The reform is obviously complex but the government has grown particularly concerned about technical bugs that may impact the new system as well as the psychology impact on tax payers who will naturally see a drop in their monthly salary on their pay slips.

Macron, already under pressure due to low popularity ratings, will fear the reform will give the French the impression that they are losing their spending power under his leadership.

The introduction of income tax at source has already been delayed until 2020 for certain workers such as privately employed home carers and child minders because the systems tasked with collecting their income tax will not be ready.

READ ALSO: How paying your income tax in France will change dramatically


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