Posted Dec 16 2022 at 18:09Updated Dec 16. 2022 at 06:14 PM
Crisis, which crisis ? Despite the air pocket through which the French economy has been going for several weeks, the government sees tax revenues settling at a higher level than expected. Enough to push the rate of compulsory levies to a historic peak in 2023, despite the tax reduction measures initiated in recent years.
The Minister Delegate for Public Accounts, Gabriel Attal, thus announced this Friday in “Le Figaro” “tax revenues higher by 3 billion euros than forecast”. This would be explained, according to Bercy, by an income tax (IR) more generous than expected.
Rising contributions
For several months, the executive has maintained that its supply policy and the support measures in the face of the energy crisis have made it possible to maintain a positive dynamic for the French economy, with 450,000 net jobs created this year. With the key to the additional IR, but also receipts of social security contributions and CSG. Gabriel Attal thus confirmed to anticipate an additional 9 billion in this area, compared to what had been announced in the fall of 2021 when drawing up the budget for 2023.
This is not the first time that Bercy has revised its tax revenue trajectory upwards, the last having taken place last November during the amending finance bill for 2022 (up to 800 million at the time). Others could still intervene in the weeks to come. “There could be some good surprises on corporation tax,” a majority source believes.
Scrambled tax balance sheet
This good news could, paradoxically, blur Emmanuel Macron’s tax balance sheet. The additional tax receipts will push the rate of compulsory levies a little higher, which should reach a historic high this year: the executive expected it in November at 45.2% of GDP – even before the announcements on the ‘IR – beating the record reached in 2017 (45.1%).
An astonishing situation, while the President of the Republic continues to hammer that he is the champion of tax cuts. In fact, the previous five-year period recorded an unprecedented reduction of 50 billion in the tax burden, and the movement must continue with this new five-year period with the abolition of the royalty and a production tax (the CVAE). But the strong recovery triggered after the Covid and the good health of companies until then have boosted tax revenues in the opposite direction. Despite everything, the government anticipated an ebb next year, with a compulsory levy rate expected at 44.7%.
Symbolic heading
Beyond this paradoxical tax balance sheet, this good news on tax receipts should in any case make it easier for Bercy to complete its 2022 budget, and perhaps even reduce a deficit which was planned for the end of this year. at the level of 5% of GDP. No doubt a relief for the executive, while France is “to the nearest euro”, according to the expression of Bruno Le Maire, the Minister of the Economy.
It is all the more so as it is about to cross a symbolic threshold. INSEE thus announced on Friday that the public debt had risen to 113.7% of GDP at the end of the third quarter, against 113.3% in the second quarter. But it is not so much the percentage as the gross amount that will strike people’s minds: public debt is thus about to burst the ceiling of 3,000 billion euros, with 2,956 billion at the end of the third quarter (+ 40 billion in three months). Last September, Gabriel Attal made no secret that this milestone of 3,000 billion would be passed in the coming months.