According to Le Monde, France is considering raising taxes on large companies

Why it matters

Barnier, who took office earlier this month, is already facing a growing budget crisis with weaker-than-expected tax revenues and higher-than-planned spending.

France’s credibility with financial markets, where borrowing costs have skyrocketed, and with its partners in the European Union are at stake.

Using the numbers

According to Le Monde, the 2025 budget could include an 8.5 percentage point increase in corporate tax for companies with annual sales of at least 1 billion euros ($1.1 billion). The tax would be temporary and could raise €8 billion in 2025.

Other possible measures include a tax on share buybacks.

context

The new government lacks a parliamentary majority and will find it difficult to pass the budget. Even government parties do not agree on whether tax increases are an option. The previous government had planned to reduce the budget deficit to 3% of GDP by 2027, but weak tax revenues and budget overruns have put that goal almost out of reach.

What’s next?

Barnier must complete the 2025 budget draft within a few days and submit it to the legislature by mid-October at the latest.

The answer

The Prime Minister’s Office and the Treasury Department could not immediately be reached for comment. ($1 = 0.8958 euros) (Author: Ingrid Melander; Editor: Emelia Sithole-Matarise)