France’s draft budget law for 2014 was presented to Parliament on September 25 and is now under discussion in the National Assembly and Senate.
It proposes reforms to rekindle France’s sluggish economy and fix the record-high deficit and unemployment rate, including a lighter tax burden on businesses, €15 billion in public spending cuts, a higher VAT and higher taxes on households.
The European Commission has already dubbed the proposals in the bill “responsible and prudent” – but the bill is rather controversial. Indeed, one French paper describes the draft bill as a budget “douloureux pour les menages,” painful for households. Businesses will largely see a stable tax level but will enjoy tax breaks that aim to upgrade their competitiveness.
Finance Minister Pierre Moscovici commented that these reforms are “essential to consolidate the recovery and boost the creation of sustainable jobs.”
Under the Constitution, Parliament has 70 days to review and approve the budget. If it fails to pass a budget by the end of that time, then the Finance Bill’s provisions can be implemented without their vote.
We will provide a more in-depth report on France’s 2014 budget proposal in the October issue of International Tax News.