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Item 1 of 5 French Economy, Finance and Industry Minister Antoine Armand and Junior Minister for Budget and Public Accounts Laurent Saint-Martin arrive to attend a press conference to present French government 2025 budget bill at the Bercy Finance Ministry in Paris, France, October 10, 2024. REUTERS/Abdul Saboor
The following are the main measures:
SPENDING CUTS
The French government will cut 2,200 jobs. The headcount for teachers, in particular, will drop, along with the expected drop in the number of pupils, government officials said.
France will cut its foreign aid budget by 1.3 billion euros.
Subsidies for apprentices and other jobs will be cut by 2.1 billion euros.
Green subsidies, in particular those for insulation and the purchase of electric cars, will be cut by 1.9 billion euros.
The planned increase of pensions due to inflation on Jan. 1 will be postponed by six months, saving 3.6 billion euros.
TAX HIKES
Big companies
France’s largest companies with revenue exceeding 1 billion euros will pay an additional tax on their profits. The tax is expected to raise 8 billion euros and, if approved, would affect 440 companies.
Wealthy individuals
Individuals earning more than 250,000 euros a year will see a temporary increase in income tax, and a minimum tax of 20% will be introduced for those households only, to prevent the use of tax loopholes, raising 2 billion euros per year.
Air transport
France will raise a tax on airplane tickets and private jets.
The amount, currently being discussed with the industry, will be added in an amendment to the budget bill during parliamentary debates.
France currently has a tax of 2.6 euros per flight, lower than in Britain or Germany, government officials said.
Utilities
Power utility EDF, which was nationalised previously, will increase its dividend to the French state by 2 billion euros.
A tax on electricity, which had been cut to almost zero during the energy crisis of the past two years, will be raised back to “slightly more” than what it was before the war in Ukraine, bringing 3 billion euros, government officials said.
The tax increase will nonetheless result in a drop of around 9% of power bills for consumers, when taking into account the fall in wholesale power prices, the officials said.
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Reporting by Michel Rose and Leigh Thomas, Editing by Louise Heavens
Our Standards: The Thomson Reuters Trust Principles.