France’s finance minister promised on Wednesday that the tax increases the government says are needed to get the country’s finances back on track will be targeted at high-income groups and will be limited in time.
A day after Prime Minister Michel Barnier pledged to tackle France’s “colossal” debts through spending cuts and new taxes, Antoine Armand told RTL broadcaster that low and middle earners would be spared the extra budget burden.
France wants to improve its financial situation by around 40 billion euros ($44 billion) next year, hoping to bring the public sector deficit to five percent of gross domestic product (GDP), up from an estimated more than six percent this year.
Two-thirds of that amount must come from cuts, and the rest from new taxes.
“Once we have managed to significantly reduce spending, it will require an exceptional and temporary effort from people with extremely high incomes,” Armand said.
Income tax brackets for “those who go to work every day” would not change, he promised.
“Large and very large companies” will also be asked to pay higher taxes, Armand said, but ruled out such an additional burden “for several years.”
In his first major policy speech to parliament on Tuesday, Barnier said the government now aims to reach the European Union’s deficit limit of three percent of GDP by 2029, two years later than previously planned.
He called France’s debts of more than 3.2 trillion euros – more than 110 percent of GDP – ‘the true sword of Damocles… hanging over the head of France and of every Frenchman’.
The cabinet must submit the 2025 budget plan to parliament next week.
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