France’s new Prime Minister Michel Barnier has proposed 60 billion euros in spending cuts and tax increases to reduce the country’s budget deficit to 5% of economic output from the current 6.1%.
He confirmed that there will be a corporate tax increase for France’s richest citizens and companies France 2 television. The tax increases are likely to only affect companies with annual turnover of more than €1 billion ($1.1 billion) and individuals earning more than €500,000 ($548,000).
The measure could affect about 300 companies in the country and would be temporary. The tax increase for people with higher incomes is expected to add €2 billion to government finances. Barnier assured that this would only be a temporary measure that would last one or two years.
More details will be provided next week when Barnier announces the full 2025 budget. It will still have to be approved by a parliament that does not have a majority.
On investor attitudes to the budget crisis, ING recently said: “The wait-and-see attitude of companies, which have suspended a large number of investments and hiring in recent months due to political uncertainty, has led to much lower than expected tax rates. receipts”
France’s top FDI references
France will be named Europe’s most attractive investment destination for the fifth year in 2024, according to an annual EY survey.
This year, despite the political turmoil that accompanied their elections, they again defeated Britain and Germany, the other two European powers.
“Faced with a post-Brexit Britain needing to reinvent its model, and a Germany shaken by the energy crisis, France is putting on a relatively reassuring face despite chronic social turbulence,” reports EY.
At this year’s annual ‘Choose France’ forum, France secured 15 billion euros in foreign investment. The prospect of 10,000 new jobs and 56 new projects was announced.
On the interest in France, Macron said it was the result of “the work done over the past seven years based on increasing knowledge, maintaining our carbon-free energy, creating a favorable normative framework and budget stability.”
Barnier’s full rollout of the budget plan next week will give investors more solid expectations for what’s to come.
“New French Prime Minister Confirms Tax Hikes for Big Companies to Close Gaps” was originally created and published by Investment Monitor, a brand owned by GlobalData.
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