The French government unveiled a 2025 budget on Thursday aimed at plugging a huge hole in public finances through tax increases and spending cuts worth 60 billion euros ($65.68 billion).
The main measures are as follows:
cut expenses
The French government will lay off 2,200 people. Government officials say the number of teachers in particular will be reduced, and the number of students is also expected to decrease.
France will cut its foreign aid budget by 1.3 billion euros.
Subsidies for apprentices and other jobs will be cut by €2.1 billion.
Green subsidies, especially those for insulation materials and the purchase of electric cars, will be cut by €1.9 billion.
Plans to increase pensions due to inflation on January 1 will be delayed by six months, saving 3.6 billion euros.
tax increase
big company
France’s largest companies with revenues of more than 1 billion euros will pay extra taxes on their profits. The tax is expected to raise €8 billion and, if approved, would affect 440 companies.
wealthy people
Income tax will be temporarily increased for individuals earning more than €250,000 a year, and a minimum tax rate of 20% will only be imposed on these households to prevent the use of tax loopholes that raise €2 billion a year.
air transport
France will increase taxes on air tickets and private jets.
The amount currently being discussed with industry will be added to the budget bill amendment during the parliamentary debate.
Government officials said France’s current tax per flight is 2.6 euros, lower than Britain or Germany.
Utilities
Previously nationalized power company EDF will increase its dividend to the French government by 2 billion euros.
Government officials say electricity taxes, which were slashed to almost zero during the energy crisis of the past two years, will be restored to “slightly higher” levels than before the war in Ukraine, bringing in 3 billion euros in tax revenue.
Still, taking into account the decline in wholesale electricity prices, the tax increase will result in a roughly 9% drop in consumers’ power bills, officials said.
