(Bloomberg) -- French Budget Minister Laurent Saint-Martin said temporary taxes to help rein in the country’s runaway public finances would hit only the very richest households and largest companies.
The French government on Wednesday announced plans for around €60 billion ($66 billion) in spending cuts and tax hikes next year in an effort to claw back the widening budget deficit and bolster investor confidence in the country.
Just under €20 billion will be generated by boosting government revenues, including from tax increases on wealthy individuals and large companies. President Emmanuel Macron endorsed the approach, so long as the hikes are temporary and targeted.
“We’re talking about 0.3% of households, the richest of the richest — a household without children that has income of around €500,000 a year,” Saint-Martin said on France 2 television on Thursday. “There will be no generalized increase in income tax.”
Asked whether businesses with more than €1 billion in annual profits would be targeted, Saint-Martin said: “As long as it’s for one year, as long as it’s exceptional and presented as such, yes, I think we’re talking about this quantum of businesses, which also have an interest in our country strengthening and cleaning up its public finances.”
After the television interview, an official from the Budget Ministry said the cutoff for businesses would be based on revenue and not profit, while declining to confirm the €1 billion threshold.
(Updates with comment from Budget Ministry in sixth paragraph.)
©2024 Bloomberg L.P.
