The Minister of Action and Public Accounts, Gérald Darmanin, on Tuesday drew up an assessment of the withholding tax, one year after its entry into force. More taxpayers are adjusting their rates downwards than upwards, which weighed on year-end revenue.

The Minister of Action and Public Accounts, Gérald Darmanin, drew up an assessment of the withholding tax, one year after its entry into force.

The “kitty” of the withholding tax will be slightly lower than expected. On the occasion of a review of this system, one year after its entry into force, the Minister of Action and Public Accounts, Gérald Darmanin, announced that the income tax had brought in 71.7 billion d ‘euros for the year 2019. A level higher than the initial forecast of the Finance Law, which was 70.4 billion euros, but 900 million euros lower than the estimate revised during the year (72.6 billion euros).

The first months of the withholding tax had reserved a pleasant surprise. The recovery rate, initially planned at 97%, stood at 99%. This is what prompted the government to revise the revenue forecast upwards to 2 billion euros in September.

Rate modulation

This good news was lessened by an unfavorable effect for the State, linked to the possibility for taxpayers to adjust their rate. In the event of a strong variation in income, users can, on their online space, ask the administration to adjust their levy rate. However, the downward modulations were more numerous than the upward modulations. There were 1 million and 820,000 respectively.

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“The French took advantage of the withholding tax to make cash. This kills the argument of those who said that the state would make cash on the backs of taxpayers ”, underlined Gérald Darmanin.

Revenues concentrated at the start of the year

Bercy had also slightly overestimated the average tax rate of the French, which is finally 6% instead of 6.3%. In addition, income turned out to be more concentrated at the start of the year, due to seasonal work and the timing of bonuses and bonus payments.

This fluctuation, within the same year, had been misunderstood in the forecasts, because Bercy did not have this level of detail in taxpayer income.

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“We now have a lot of quantified elements that we did not have until now”, said the head of the Directorate General of Public Finance, Jérôme Fournel, who is nevertheless delighted that the difference in revenue forecasts is only 1 billion euros. “If I had been told that a year ago, I would have signed with both hands”, he added.

Dynamic tax revenue

In the end, this slight delay in income tax will have been offset by good news on other tax revenues, in particular transfer taxes which are still driven by property prices. The government also announced last week that the state deficit was smaller than expected in 2019. It stood at 92.8 billion, while the executive was still counting on 97.6 billion there. is only two months old.

The minister, who has also just announced his candidacy for mayor of Tourcoing, was to give further details during a hearing Tuesday evening at the Finance Committee of the National Assembly and the Senate.