French government plans tax hikes and spending cuts in 2025 budget

The French government has unveiled a series of fiscal measures aimed at curbing spending and increasing tax revenues in order to regain control over a burgeoning public deficit and escalating national debt.

Proposed Budget for 2025

The proposed budget for 2025 reflects a significant shift in policy, targeting both large corporations and wealthier households while also imposing cuts across various sectors.

The Ministry of Labor has requested 1.2 billion euros for bonuses, with discussions ongoing about potential adjustments to subsidy structures.

Stricter Environmental Regulations

The automotive industry is facing stricter environmental regulations and taxation, with the government planning to intensify CO2 emission penalties for passenger vehicles through 2027.

New Taxes

The government is also considering a new tax on airline tickets and an exceptional tax targeting large sea freight companies.

Spending Cuts

The government is implementing substantial spending cuts, with a total of 20 billion euros earmarked for reductions, alongside an additional 1.5 billion euros from state operators.

Key ministries will face stringent budgetary constraints, and civil servant positions will be reduced.

Temporary Tax and Retirement Pensions

The government aims to impose a temporary tax on the wealthiest households and postpone the traditional revaluation of retirement pensions.

Social Security and Health Insurance

The government aims to reduce the Social Security shortfall and limit the increase in health insurance spending.

Political Environment

The proposed budget is being introduced in a politically charged environment, with ongoing threats of censure and a fragile majority supporting the government.

The government's approach to fiscal policy reflects a delicate balancing act between addressing financial challenges and maintaining political stability.

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