On Thursday, the 2025 finance bill was presented to the Council of Ministers. While fears loomed, particularly regarding the flat tax, a possible increase does not seem to be on the agenda for the moment. Here are the important elements.
The 2025 finance bill was presented to the Council of Ministers
This week, the new government presented its finance bill (PLF) for the year 2025. While Prime Minister Michel Barnier called a few weeks earlier for “shared effort” for “collective recovery”, we could fear that the flat tax would increase beyond 30% of profits.
However, in the version published Thursday, this famous flat tax seems spared, as does a possible additional tax on cryptocurrencies.
That said, a tax increase will not be avoidedand a serious situation is mentioned in the introduction to the PLF:
The situation of our public finances is serious. Rising interest rates increase the debt burden for 2024. We must commit resolutely and without delay to the path to recovery. If we do not act, the public deficit could reach around 7% of GDP next year.
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So, the State wants to reduce its spending by 40 billion euroshalf of which would be achieved through credit stabilization. Let us remember, however, that this amount seems very insignificant, at a time when the country's debt amounts to more than 3,200 billion euros and its deficit to 166.6 billion euros.
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Targeting higher incomes and protecting less well-off households
Among the concrete measures cited in the PLF 2025, we find, as often, an increase in taxation for high-income households. Thus, when a couple sees their taxable income exceed 500,000 euros annually, their minimum tax rate should reach at least 20%. With this measure, the government hopes to generate 2 billion euros in additional tax revenue.
Then, the CO2 penalty would be increased for vehicles considered “the most polluting”, with a gradual increase in the maximum price. At the same time, the threshold for triggering this penalty could be lowered.
Like last year, income tax will be indexed to inflationwhich will prevent 530,000 households from becoming taxable. Conversely, this measure will cost the government 3.7 billion euros.
Concerning the agricultural sector, it will also be granted some facilities, in particular with a strengthening of the deduction for precautionary savings, making it possible to cope with climatic hazards for example. Furthermore, the rate of exemption from property tax on undeveloped properties in favor of agricultural land will be raised by half.
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Now that the PLF has been presented to the Council of Ministers, it must still follow several steps before official adoption:
- Deposited in the National Assembly;
- Examination by the finance committee;
- Debates in public session at the National Assembly;
- Vote in the National Assembly;
- Examination and vote in the Senate;
- Parliamentary shuttle;
- Final adoption;
- Promulgation by the President of the Republic;
- Publication in the Official Journal.
Through all this path, its content could therefore still changeand its analysis will have to be repeated at the end of this whole process.
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Source: Government
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