COMPANIES CONCERNED
After spending spiralled out of control this year and tax income fell short of expectations, Barnier’s government has proposed €60 billion in savings in its 2025 budget through spending cuts and tax increase.
Though the government has targeted the bulk of its tax hikes on the wealthy and big companies, its budget bill includes plans to rein in a tax incentive on employers’ social security contributions for low-income workers.
The measure was intended to raise €4 billion, though the government has since opened the door to a lower number if lawmakers come up with an alternative to make up the difference.
Nonetheless, companies are already up in arms that the reduced tax incentive would raise their cost of labour, which is already among the highest in Europe largely because of hefty social security contributions.
Julien Crepin, the head of corporate cleaning firm Bio Propre near Paris, said that any increase in labour costs would threaten his business model and force him to raise prices, potentially leading to layoffs.
“We’ve got small margins in our business. So an earthquake like that would knock us out,” he told Reuters, adding it would be much preferable to get rid of a holiday.
Even Barnier’s own finance minister, Antoine Armand, is critical of reducing the tax incentive, saying that the French generally needed to work longer.
“An hour longer worked is an hour more of social security contributions,” he told Le Parisien newspaper on Wednesday.
Source: CNA
