Paris: France’s new Prime Minister, Michel Barnier, is considering a temporary increase in corporate taxes on the country’s largest companies, as well as a tax on share buybacks, in a bid to address a growing budget shortfall, according to a report by Le Monde on Sunday. The measures are part of efforts to plug a significant gap in public finances as tax revenues fall short of expectations, while government spending exceeds planned levels.
Barnier, who took office earlier this month, is under pressure to restore France’s financial credibility both with the financial markets—where borrowing costs have risen—and among its European Union partners.
According to Le Monde, the 2025 budget may include an 8.5 percentage point hike in corporate tax for companies with annual turnovers exceeding 1 billion euros ($1.1 billion). This temporary tax could generate approximately 8 billion euros in 2025. Additionally, the government is considering introducing a tax on share buybacks as another potential revenue-raising measure.
The proposed tax hikes come as Barnier seeks to stabilise public finances while balancing the need to maintain France's economic competitiveness.
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