French Court Of Auditors Criticizes Tax Breaks
Monday, February 15, 2010
According to the French Court of Auditors, the country’s record deficit
is not only due to the economic crisis, but also to the fact that the government
has not sufficiently maintained control of public spending in order to offset
both a reduction in taxes and the introduction of additional tax breaks or
In its 2010 annual report, the Court underlines the need to rapidly reduce
the structural deficit to enable the government to weather future economic crises.
In order to achieve this goal, the Court emphasizes the need to increase fiscal
revenue, and points out that the plethora of tax breaks available in France,
which serve to reduce vital income, must urgently be reviewed.
The Court also recommends a systematic reduction of the ceiling applied to
both tax reductions and tax credits, and notes that an increase in social levies
is particularly necessary to end spiraling social debt.
In its response, the government confirmed its intention to assess existing
tax breaks available in France, in order to ascertain whether or not they should
be maintained. It also noted that a report into the efficiency of current fiscal
spending and tax breaks would be submitted to parliament by summer 2011. This
assessment will enable the government to accurately adjust existing measures
in place in an efficient and lasting way, it concluded.