The government has chosen a “recovery and investment” budget for 2022, defended Bruno Le Maire on Wednesday, assuring the “total sincerity” of the executive on these budget choices.
With the end of “whatever it takes,” the government anticipates a reduction in total State spending by 34.5 billion euros (-7.9%). However, the final budget of Emmanuel Macron’s five-year term announces a significant increase in the funds allocated to ministries, with nearly 12 billion euros more. This does not include the investment plan of 20 to 30 billion euros and the creation of an engagement income for young people, which the executive is expected to unveil shortly and incorporate into the budget proposal during the parliamentary debate.
On the other hand, the government has not announced any new cost-saving measures at this stage. This is not surprising: the last budget of a five-year term is never the most ambitious in terms of expenditure control, even though it is traditionally amended after the presidential and legislative elections.
For its part, the High Council of Public Finances, which delivers an advisory opinion, criticized on Wednesday a 2022 budget that is incomplete, preventing it from providing a “fully informed” opinion. “In 2022, the revenue and expenditure forecasts are very likely underestimated,” it asserts.
Reduction in income tax, abolition of the wealth tax (ISF) and creation of the real estate wealth tax (IFI), reduction in production and corporate taxes, elimination of the residence tax… Emmanuel Macron’s five-year term has been marked by significant tax reforms.
This year, the 20% of the population who still paid the residence tax on their main residence will benefit from a 30% reduction, before its total elimination in 2023. Companies, meanwhile, will also benefit from a further reduction in corporate tax. In line with the movement started in 2018, it will be reduced to 25% for all companies, compared to a maximum of 33.3% in 2017.
