MPs voted against a round of tax increases. This could have repercussions on French portfolios.
Drama at the National Assembly! During the first vote on the 2025 budget, the majority of deputies voted against the tax increase, which was initially adopted by MPs. This means that many tax increases, particularly on the wealthiest and most successful businesses, are backfiring, at least initially. On the other hand, this means above all that the increase in the electricity tax, which will affect all French people, is about to come into force.
Since the majority of deputies voted against the “revenue” part of the 2025 finance law, all the voted adjustments fell by the wayside. That is, in particular, a new tax on the wealth of billionaires, an additional tax on dividends of companies with a turnover of 1 billion euros, a universal tax on multinationals, a tax on noisy two-wheelers or even restitution of a corporate tax (CVAE). No more extra recipes.
The text will now be sent to the Senate, but it will be the first version written by the government, which plans to double the TICFE, the tax paid by all families and businesses, on electricity bills. It is this text that also provides for an exceptional contribution from the richest so that 20% of their income is subject to taxes, the increase in VAT on gas boilers or even the fine on polluting vehicles.
11.44pm – When will we know exactly the final tax increases?
After the Assembly, the Senate, then the Joint Parliamentary Commission. As pointed out by government websitethe Constitution however sets the end of the parliamentary commute around 21 December 2024 for the adoption of the budget. The 2025 Budget must in fact be promulgated by the President of the Republic at the latest and published in the Official Journal on 31 December.
10.53pm – Are the tax increases definitely implemented?
Even if the text in its original version reaches the Senate, where the government has a solid majority, does this mean that the tax increases are definitively implemented? No, because after the Senate the text will necessarily pass to the joint commission (CMP) where it will be up to seven deputies and seven senators to find a compromise. Nothing is definitive at this stage.
9.03pm – “Today everyone will take responsibility,” said Clémence Guetté before the vote
Before the vote that led to the rejection of the “revenue” component of the 2025 finance law by the Assembly, the vice-president of the National Assembly and deputy of the LFI, Clémence Guetté, expressed herself in Palais Bourbon regarding this text, before conclude: “We will
– Solidarity tax on dividends for billionaires
– Cancellation of the electricity tax increase
– 0% VAT for overseas territories
– Taxes on share buybacks
– Tax on super profitsHere are some examples of what we managed to get adopted… pic.twitter.com/POv1ZKn3iR
— Clemence Guette (@Clemence_Guette) November 12, 2024
8.12pm – When will the debate on tax increases be held in the Senate?
The rewriting of the budget will therefore take place mainly in the Senate, a right-oriented upper house where the government has a solid majority, which should a priori work in its favor. In any case, Public Senate announces this evening that the examination of the text, which identifies possible tax increases, will begin on Monday 25 November, i.e. in fifteen days. The debates will take place until Thursday 12 December, the date of the solemn vote, which should take place in the afternoon or evening.
19:06 – What does the rejection of the “revenue” component by the Assembly mean for the Senate
The “revenue” part of the 2025 finance law rejected at Palazzo Borbone therefore marks the end of its examination by the deputies, but not only. This, in fact, will also allow the government to come out with its first version of the text in the Senate, and not with a text that promises to be profoundly reshaped if it were approved. All the tax increases originally foreseen by the text are therefore back on the table. However, those added especially by the left, during the passage of the text in the Assembly, are deleted.
18:06 – What tax increases have been removed?
With this vote, tax increases on the richest were also eliminated. Including:
- A new tax on the wealth of billionaires
- The perpetuation of a 20% tax starting from a certain level of income
- The perpetuation of additional taxation on large businesses
- A tax on super dividends
- An increase in taxes on financial transactions
These measures could still return in the final text depending on parliamentary work, but it is difficult to imagine that the Senate, especially on the right, will take up these measures initiated mainly by the New Popular Front.
18:01 – What tax increases are currently planned?
With this vote of the Assembly many things are called into question. At present, if nothing changes, here are all the various tax increases that could come into force from 1 January 2025:
- Increase in electricity tax (TICFE): from €0.21/KwH to €0.42 or €0.50
- Increase in taxes on airline tickets
- Increase in fines on combustion cars
- VAT increase from 5.5 to 20% on gas boilers
- Surtax on very high incomes
- Surtax on large businesses
- Tax on share buybacks
This still remains subject to the work of the Senate and an agreement between the two parliamentary chambers.
5.52pm – Who voted against increasing taxes for the richest?
With this rejection of the text, a whole series of tax increases for the richest, especially businesses, will fail. RN, Macronists and LR all voted against. Only the left voted in favor of the revised text, which is now obsolete.
5.41pm – What does this MPs vote mean for my wallet?
At this stage, this vote of the deputies means above all that the increase in the tax on electricity, paid by all French people, remains in the bill, as does the increase in the ecological penalty on vehicles or even the increase in VAT on gas boilers.
5.38pm – Tax increases canceled by parliamentarians
Although parliamentarians initially approved several tax increases and some increases were canceled, on November 12 everything fell apart. 362 deputies voted against the “revenue” part of the finance law for 2025, thus undoing all the work done so far by parliamentarians.
The text will now be sent to the Senate, marking the introduction of the government’s first version which plans to double the TICFE, the tax charged on electricity bills for families and businesses. This draft also outlines a special tax contribution from the wealthiest, imposing a 20% tax rate on a portion of their income, along with an increase in VAT on gas boilers and enhanced fines for polluting vehicles.