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The new French Prime Minister, Michel Barnier, is considering a temporary increase in corporate tax on large companies, in addition to a tax on share buybacks, as part of efforts to plug a major hole in public finances, according to Le Monde newspaper..
Barnier took office earlier this month, and already finds himself facing a growing budget crisis, as tax income is weaker than expected and spending is higher than planned..
Le Monde says that the 2025 budget may include an 8.5 percentage point increase in the corporate tax, which has an annual turnover of at least one billion euros ($1.1 billion). The tax will be temporary, and may generate 8 billion euros in 2025..
Other potential measures include a tax on share buybacks.
The new government lacks a parliamentary majority, and adopting the budget will be difficult, as even the parties in government do not agree on whether tax increases are an option or not..
The previous government was planning to reduce the fiscal deficit to 3 percent of GDP by 2027, but weak tax revenues and budget overruns made this goal difficult to achieve..
Barnier needs to finish the draft 2025 budget within days, and deliver it to lawmakers by mid-October at the latest..
