Pierre Moscovici, president of the High Council of Public Finances (HCFP), estimated this Wednesday April 17 that the government “did not have the means” given the state of its public finances to make “tax cuts dry”, contrary to the promises of the executive.
Pierre Moscovici, also first president of the Court of Auditors, was heard this Wednesday by the Finance Committee of the National Assembly, on the subject of the government’s new deficit reduction trajectory, on which the HCFP issued an opinion on Wednesday. The “clear reduction in the deficit supposes […] a re-examination of the planned reductions in compulsory levies”, affirmed the independent body placed with the Court of Auditors.
“A reasoning of coherence”
“In the compromised situation of our public finances, we do not actually have the means to make direct tax cuts,” said Pierre Moscovici during his hearing, in reference to the promises of the President of the Republic Emmanuel Macron to achieve “two billion tax cuts in 2025” for middle-class French people.
The government also has in its pipeline the total elimination of the CVAE, a production tax weighing on businesses. After having reduced it by half in 2023, or 4 billion euros, he was to eliminate it in 2024, but ultimately only reduced it by one billion this year, promising total elimination by the end of the five-year term. .
“The government is free to vote for tax cuts naturally”, but “they absolutely must be offset by additional savings which must be included in the balance”, judged Pierre Moscovici.
While the government seeks to save 20 billion euros in 2024 and the same amount in 2025 to ensure a return to the deficit below 3% of GDP in 2027, we must have “consistent reasoning”, argued Pierre Moscovici, emphasizing that “the room for maneuver to increase revenue [étaient] limited”.