French households are set to benefit from a drop of €9.3 billion in their taxes in 2020, with further drastic cuts announced for the next five years.
The country’s High Council of Public Finance unveiled the loosening fiscal measures on Friday, ahead of the official presentation of France’s 2020 draft budget (PFL) on September 27.
The two most notable tax breaks for 2020 will be the €5 billion income tax cut that will benefit France’s middle classes (promised by Macron during “Le Grand Debat”) and the abolition of the housing tax (taxe d'habitation) for 80 percent of French households, accounting for a further €3.7billion in cuts.
There’s also the government’s decision to continue reducing the CSG social charge, a levy deducted from salaries and pensions that goes towards paying for France's social security system.
French financial newspaper Les Echos sees a continuing “cause and effect” connection to France’s yellow vest movement in this regard, as much of this year’s €10.2 billion fiscal cuts have been allocated to this measure, in particular for pensioners.
Taxes on overtime will also be slashed by €800 million next year, another measure announced to try to quell the yellow vest anger.
“The message we want to pass on vis-à-vis these tax cuts is that the 2020 budget will remembered for the promises that were made and kept,” Les Echos quoted a parliamentarian of the majority as saying.
“The tax breaks are historic and unparalleled in 20 years,” added the Department of Public Accounts.
There are however a couple of tax increases planned for 2020 as well, such as that on tobacco, which will drag €500 million into French state coffers.
The same goes for France’s energy transition tax (CITE), which will increase slightly by 0.1 percent of the tax budget, bringing in a further €100 million.
In 2022 the yearly tax cutback has been set to €20.6 billion and by 2024 the government has promised the figure will have fallen even further to €27 billion.
In 2018, the tax burden drop for French taxpayers was €1.1 billion by comparison.