The Minister of the Economy, Bruno Le Maire, is considering a further reduction in the C3S, a payroll tax, from 2021. For the rest, the government’s gesture would be limited to a tax incentive for investments in the energy transition .
In the shadow of the debate on pensions, Bercy is trying to advance its “productive pact”. Pending the announcements of the President of the Republic in the coming weeks, the Minister of the Economy on Tuesday clarified the avenues on the table to reduce production taxes, one of the components of this pact whose ambition is to ” achieve full employment in 2025.
On the occasion of greetings to economic players, Bruno Le Maire announced that this downward trajectory would be voted in the next finance bill and would start in 2021.
Block of 72 billion in taxes
The idea is to tackle the block of 72 billion so-called “production” taxes, in which there are many sectoral taxes, local taxation and taxes based on the wage bill, such as the transport payment or the C3S. . Those who argue for a massive reduction in this tax, deemed penalizing for “Made in France”, risk being disappointed.
Bercy is indeed considering a first drop in C3S in 2021, but the trajectory would be spread over several years, raising fears of new postponements as during the five-year term of François Hollande. The Economic Analysis Council (CAE) recently showed the harmful nature of this tax, the revenue of which is estimated at around 3.8 billion euros. Either its rate would be gradually lowered, or the scope of the companies subject to it would be reduced each year.
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To finance this gesture, savings measures will have to be found, which would be for Bruno Le Maire the opportunity to relaunch, for example, the site of daily allowances for sick leave, abandoned this summer.
We are far from the “fiscal shock” of 10 billion euros recommended by the General Inspectorate of Finance. Because the C3S is the only tax for the moment for which the executive is considering a significant gesture. The reasons are first of all budgetary, since the State will already have to finance the next stages of lowering the corporate tax (IS), the rate of which must be reduced to 25% in 2022.
This prudence is also explained by the fact that a large part of production taxes are in the hands of local authorities (property tax, CFE, CVAE), already scalded by the reform of the housing tax. Thus, the government would like to give the regions the freedom to reduce the CVAE but it is not sure that the elected representatives are seizing this possibility en masse.
Incentive for ecological transition
A third avenue is explored, this time concerning a tax incentive to invest in ecological transition. Manufacturers defend over-depreciation, that is to say a reduction in corporate tax over the depreciation period of the equipment, like the measure taken by Emmanuel Macron when he was Minister of ‘Economy.
Bercy leans more for a reduction in local taxes, as companies can benefit from when setting up or expanding a factory. This possibility would be offered for a series of green investments.