Taxes: The tax revenue of the state has decreased
The numbers speak for themselves: France recorded -7.7 billion euros less in tax revenue compared to the 2023 forecast and thus reached only 20 billion euros.. The bulk of this gap comes in net corporate taxes: -4.4 billion euros. VAT and income tax are not spared, representing a decrease of 1.4 billion euros respectively. ” The 2023 hole will not be filled, so the government is starting further back to achieve these budgetary targets. And, with weaker-than-expected growth this year, incomes will continue to decline.François Ecalle, director of Fipeco, explains.
The bad news began with the January 2024 release The budget deficit which has increased by +2.2 billion euros compared to the forecast for 2023, is thus 173 billion euros.. France’s financial situation is catastrophic. All signals are red. The urgency of the situation is finally being realized if the government has not been really cautious so far. Both Bruno Le Maire and Thomas Cazeneuve announced the need to save 10 billion in the 2024 budget, in particular by cutting spending by 1% spread across various ministries.
The internal market needs to be revived
You have to go back to 1974 to find France’s last surplus budget. Since then, its deficit has continued to rise, pushing the French public debt threshold above 3,000 billion euros in 2023. All previous governments bear some responsibility for this tragedy. Just watch the Contributables et Associés Association documentary film, Three Trillion: Secrets of the Bankrupt StateTo understand it. If France managed to register a growth of +0.9% for the year 2023, this was mainly due to the recovery in its foreign trade. However, this is not suitable for the medium to long term. That is what is needed We must also, and above all, restart the internal market, to reduce unnecessary costs as well as aid that is distributed haphazardly (bicycle repair aid, social leasing for which the initial budget has been multiplied by two (600 million euros), etc.).
Was the drop in tax revenue unexpected? No. With continued inflation and rising energy prices – the government knows this well – French purchasing power continues to decline and the number of bankrupt companies is at its highest level since 2017 (more than 55,000 failures in 2023 alone). In other words, French companies are running out of steam and the French are spending less, most have no choice but to deprive themselves, while others choose to save. Without improving the purchasing power of the French, the internal market cannot be revived, and state revenues will continue to decline.
Yet we’ll be glad to know that, according to a source from our colleagues at Le Figaro, the president seems to be (finally) concerned about France’s financial situation. After managing to raise French public debt by +600 billion euros since its first mandate in 2017, it was time. However, and still according to this source, Emmanuel Macron” Don’t wake up every day thinking about the deficit problem ». This is very unfortunate. France is in the running, but it still doesn’t make it a priority for the president.
