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France May Cut Tax In Response To Protests

Monday, April 15, 2019

French Prime Minister Edouard Philippe has said that France should prioritize tax cuts following the conclusion of a three-month national consultation on the Government's economic and tax policies.

After being presented with the findings of the "Great Debate," commenced in December following weeks of protests against certain tax measures, Philippe said on April 8 that "we need to lower taxes and lower them faster."

While Philippe did not announce any specific tax proposals, it has emerged from the consultations that taxpayers are most opposed to high rates of income tax and value-added tax.

The "gilets jaunes" protests, which began towards the end of 2018, initially began in response to the Government's plans to raise taxes on petrol and diesel from January 2019 to help achieve France's carbon reduction targets. However, they quickly escalated into a general protest against the direction of the Government's economic policies.

In December 2018, the Government announced that the fuel tax hikes would be suspended for at least six months, with Philippe acknowledging at the time that taxpayers' discontent runs deeper – that there are long-standing grievances harbored by French taxpayers about social injustice in the tax system for workers.

According to a report published by Eurostat, the European Union's statistical office, in November 2018, France had the highest tax burden in the EU in 2017, with a tax revenue to GDP ratio of 48.4 percent.