One year after the implementation of the withholding tax, no major “bug” is to be deplored. The next practical consequences will be felt next spring, when some 12 million tax households are expected to be exempt from filing income tax returns.

The withholding tax brought in 2 billion more to the State Budget.

Changing the way in which taxes are levied in the midst of the “yellow vests” challenge: it was the site of all dangers. Four months before the implementation of the withholding tax, the hesitation had seized up to the head of state. So much so that, three hours before the Prime Minister’s intervention in the 8 p.m. newspaper in early September 2018, the Budget Minister himself did not know what the announced decision would be.

A year later, Gérald Darmanin delights in recounting this episode with feigned detachment. And for good reason, the predictions of serial “bugs” did not materialize. The withholding tax has entered the daily life of the French without any voice calling for a step back, including in the ranks of the opposition where, like the deputy LR Marc Le Fur, some have tried so far. in the very last sessions in the Assembly to torpedo the project.

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Everything was played out in the first days of January 2019 for acceptance in the eyes of the general public. The Minister of Action and Public Accounts, after having repeated for months that ” all [était] ready “, knows he’s on the grill.

From January 2 first hour, he goes to a call center in Amiens where tax officers answer questions from taxpayers. “There is no bug”, he declares at the exit, even though only a small minority of households have been sampled. This is the message retained by the news channels in their banners.

1.4 million tax calls

Throughout the month of January, Gérald Darmanin makes a weekly update with the press, where journalists are inundated with uninteresting figures. A month later, when all taxpayers have been levied at least once, the ranks of the press conference are sparse.

The only known “bug” concerns a public hospital where collection was restored the following month, even if the reform raised many questions among the French. In January, tax offices received 1.4 million calls, the equivalent of what they receive in the usual four months!

Some computer accidents

The following steps are taken without major clashes: income declaration in the spring, payment of the balance of tax credits in the summer, tax notice in September with a possible regularization. Some computer accidents are noteworthy, such as the tax return which had to be extended by two days after a heavy traffic on the site or a hack of thousands of tax sheets by hackers in August.

The Bercy unions see it rather as an indirect consequence of the withholding tax which mobilized the IT budgets of the tax administration for three years.

Good tax collection

By the way, withholding tax is good news for the State Budget. 2 billion additional revenues are announced for the year 2019. A good collection linked to the fact that the tax was levied on 2019 income (and not 2018 where they were on average lower). With one qualification, however: some of these taxes may be the subject of a subsequent challenge, for example in the field of exceptional income for 2018.

If the announced disaster did not materialize, it is in particular because the administration relied, for the tax at source, on a tool tested by the payroll services, but little known to the general public. This is the “nominative social declaration” (DSN), a file through which employers send all the necessary information to social protection organizations (Urssaf, Agirc-Arrco, mutual insurance companies, providence, etc.) on a monthly basis. equivalent (Pasrau) was put in place for public employers, before they too switch, by 2022, to the DSN.

First practical consequences

It also remains to measure the long-term effects on tax consent. Will income tax be more painless, and is it a good thing that taxpayers no longer distinguish between collecting and collecting payroll taxes?

In the meantime, the first practical consequences will be seen next spring. Some 12 million tax households, or one in three, those with the simplest tax situation, will be able to do without an income tax return.

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