PARIS: While the French are renowned for their burdensome taxes, it turns out that a record low number of people will actually pay income tax this year. Here’s why.
A report revealed on Tuesday that almost nine million French people will see their taxes decrease this year, meaning many workers will sink below the lowest income tax threshold.
That means that in total, only around 16 million French people will be paying income tax this year.
Although while they won’t have to pay income taxes, they haven’t gotten away scot-free, of course, as the French government already deducts a healthy amount of social charges directly from workers’ pay packets.
This figure – which represents 46 percent of the country’s total workers – is enough to be a record low, down from 46.5 percent in 2015, 47.5 in 2014, and 52.3 percent the year before.
The Socialist government has made several cuts to taxes in recent years to benefit the country’s worst-off workers in the hope that it will boost their popularity among the left.
The cuts include the removal of the lowest tax band at 5.5 percent, which is the reason why many low earners in in France don’t pay income taxes.
The 2016 budget also included a reform that meant another 1.1 million households would not be paying income tax.
On Thursday, Finance Minister Michel Sapin chose to remind voters that out of 17 million tax-paying households in France, eight million will have seen their income taxes reduced, some to the point where they don’t have to pay.
As a result of the cuts income tax in France now only generates €70 billion for the government, much of which is being stumped up by the country’s wealthiest workers.
Around 10 percent of tax payers cough up around 70 percent of the tax receipts, while the country’s richest one percent account for 45 percent of income for the taxman.
