The list is long: fewer tax advantages for the wealthiest retirees, better consideration of family expenses… This is what could strengthen the equality of the French in terms of income tax (IR), d ‘after the Council for Compulsory Deductions (CPO). And these recommendations – which aim to recover more than a billion euros per year – are timely, since on Thursday October 17, the 2025 finance bill will be examined in the National Assembly. While the debates promise to be fierce as the copy of Michel Barnier has sparked criticism, this body attached to the Court of Auditors fully intends to get involved. Especially since the budgetary context is tense.
“The report […] sets itself the objective of reinforcing the equality of citizens in the face of income taxation” in the interests of “fiscal justice and consistency”, assured Monday the president of the CPO, Pierre Moscovici, during a press conference. To guarantee the acceptability of savings, it is essential to reinforce equality in the face of taxation, because it is the key to consent to taxation”, he added. But “we must not ‘prohibit the use of fiscal leverage’ provided that the measures are ‘measured, targeted’, he underlined. Comments that the former socialist minister already made in the columns of L’Express in September 2023.
Guest of the Grand Jury the day before, Pierre Moscovici then declared that he did not “share” the opinion of Gérald Darmanin or Gabriel Attal, for whom the question of taxation is one of the red lines not to be crossed. Given the poor situation of public accounts, the former Minister of the Economy believes that the head of government “had no other choice but to make an essential effort”, referring to the effort of 60 billion euros from 2025 to restore public finances.
To achieve greater “fiscal justice and consistency”, the CPO therefore recommends taking better account of family structure and the costs of maintaining a child in income tax, paid in 2023 by 18.5 million tax households out of the 40.2 million in France. For example, he supports an increase in the family quotient ceiling.
Unjustified preferential tax treatments
The budget watchdog also notes that middle-class couples are at a disadvantage compared to single people without children due to the application of the discount, a mechanism for reducing income tax. Thus, “a couple with an income of 20,000 euros per person finds themselves having to pay an IR 304 euros higher than that paid separately by two single people with equivalent income”. To prevent 3 million middle-class tax households from remaining disadvantaged by this common taxation, the CPO is proposing “a complete combination of the reduction”. Conversely, he believes it would be appropriate to eliminate the additional half-share for single people who have raised a child alone in the past for five years.
The CPO also considers “certain preferential tax treatments” unjustified. In its sights, the tax advantages of pensions which benefit all retirees including the most well-off, while the government’s decision to postpone by six months, to July 1, the indexation of pensions is denounced by the left and the RN .
Concretely, the measure would consist of reserving the 10% reduction on retirement pensions for income tax for “the most modest retirees”. “By reducing the tax advantages linked to pensions, the CPO estimates that the State could reduce this tax expenditure from 1.4 billion to 1.8 billion, depending on the resource ceiling chosen,” underlines the Figaro.
Reduce certain tax credits
Also mentioned are the distortions favoring furnished rentals compared to unfurnished rentals, or exempt salary supplements, such as the value sharing bonus, which the Council is calling for to be abolished. It also recommends adjusting or even eliminating certain tax credits, such as the tax reduction for tuition fees – which duplicates the back-to-school allowance – or that relating to investments in Overseas for individuals.
Concerning the tax credit for the employment of an employee at home (for the household for example), the rate could be reduced from 50% to 40% and that of the tax reduction for donations from 66% to 50%. “This tax credit is largely focused on the highest tenth of income. The initial objective of better combating hidden work can still be achieved by lowering its rate from 50 to 40%,” explains Pierre Moscovici.
The CPO also insists on the need to intensify the fight against fraud in the taxation of personal income. In 2023, income tax (which is progressive) and social security contributions (which are proportional) brought in 262.8 billion euros, or 9.3% of GDP.