The new French government wants to reduce the budget gap by 60 billion euros in 2025 and is preparing a temporary tax increase.
The new French government has announced a decision to raise taxes starting in 2025. The Minister of Finance Antoine Armand said this on RTL radio.
The draft budget for 2025 with specific proposals is to be released on October 10.
The goal of the French authorities is to reduce the budget deficit by 60 billion euros. This is partly planned to be done by cutting spending (by €40 billion) and partly by increasing budget revenues.
“As soon as we manage to cut spending significantly, we will need exceptional and temporary help from those with very high incomes,” Arman said. He assured that people with low and middle incomes will be exempt from the additional fiscal burden: “The income tax rates for those who go to work every day will not change.”
His government colleague, Laurent Saint-Martin, Minister of Budget and Financial Accounts, said on France 2 on Thursday that only 0.3% of the population will feel the tax increase – the richest households in France, those without children and earning an annual income of 500,000 euros.
The tax increase will also affect the largest companies.
Earlier this week, French Prime Minister Michel Barnier warned that the current financial situation in the country is a sword of Damocles hanging over every French citizen. “We need to act now to ensure a stable financial future for our country. Our debts exceed €3.2 trillion, and this is a situation we cannot ignore,” he said.
In September 2024, for the first time since the global financial crisis, the yield on French government bonds exceeded that of Spanish securities. The reason is that the budget deficit in France is too high.
Last year, it was 5.5% against the planned 4.9%, and this year it may reach 6%, which is much higher than the European Union’s limit of 3%. At best, France will be able to return to the target no earlier than the end of this decade.
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A revised draft law on tax increases during wartime (No. 11416-d) was registered in the Verkhovna Rada on Friday, the parliament’s website reports.
The text of the draft law on amendments to the Tax Code of Ukraine regarding the peculiarities of taxation during martial law is not yet available on the website.
The draft law is authored by MPs Danylo Hetmantsev and Andriy Motovylovets (Servant of the People faction) and Oleksandr Lukashev (Restoration of Ukraine parliamentary group).
As reported, the Parliamentary Committee on Finance, Taxation and Customs Policy recommended that the Verkhovna Rada adopt as a basis the revised draft law on raising tax rates.
According to Committee Chairman Hetmantsev, the draft law provides for an increase in the military tax rate from 1.5% to 5%, setting the military tax at 1% of income for individual entrepreneurs (IEs) for single tax payers of group III and at 10% of the minimum wage for single tax payers of groups I, II and IV.
LAW, PARLIAMENT, TAX
Metinvest Group’s Central, Ingulets and Northern Mining and Processing Plants (MPPs), which were transformed into United Mining and Processing Plant (UMPP), paid UAH 2.8 billion in taxes in January-June 2024.
According to the company’s press release on Thursday, in the same period of 2023, YuGOK, Central GOK and InGOK transferred UAH 1.4 billion to the state and municipal budgets.
“Despite the ongoing war, economic difficulties and challenges, Metinvest’s Kryvyi Rih enterprises remain one of the largest taxpayers and a strong pillar of the region and Ukraine,” the company said.
It is specified that in the first half of 2024, the main sources of budget revenues from Northern GOK, Central GOK and InGOK were the subsoil use tax – UAH 1.7 billion. The treasury also received a single social contribution of almost UAH 357 million and personal income tax of UAH 318 million. The list of the largest contributions includes land fees and environmental tax.
According to the press release, Kryvyi Rih enterprises remain the largest employer in the region. In addition, the GOKs continue to support Kryvyi Rih and the community by implementing joint humanitarian, educational and infrastructure projects.
As a reminder, in the first half of 2024, Metinvest Group increased its tax payments to the Ukrainian budget by one and a half times, to UAH 10 billion.
As reported, Metinvest is implementing a new model for the operation of Kryvyi Rih mining enterprises, uniting mining and processing plants in Kryvyi Rih under one management.
“Given the current challenges, with no objective way to bring the workload of the GOKs to the optimal level, we are looking for the effect of combining their capabilities and business processes. To this end, the company sees its GOKs not as separate facilities with separate teams, but as one large production site and one large team, and tries to use the advantages of each GOK in a single technological chain. The creation of a single administrative and management center, so to speak, a consolidated GOK, will significantly simplify, speed up and increase the efficiency of these processes, as well as contribute to the creation of new synergies between the enterprises,” explained Yuriy Ryzhenkov, CEO of Metinvest, earlier.
In 2023, Metinvest’s Kryvyi Rih enterprises paid a total of UAH 4.6 billion in taxes and fees to the budgets of all levels.
“Metinvest comprises mining and metallurgical enterprises located in Ukraine, Europe and the United States. Its major shareholders are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.
Metinvest Holding LLC is the management company of Metinvest Group.
Metinvest Mining and Metallurgical Group, including its associates and joint ventures, increased its payments of taxes and fees to the budgets of all levels in Ukraine by 56% year-on-year to UAH 9.9 billion in January-June this year.
According to the company’s press release on Monday, the largest payment is the subsoil use fee, which more than tripled to UAH 2.9 billion in the first half of 2023. The second largest payment was the unified social tax of UAH 1.8 billion, up 19%. The top three largest payments were made in the form of UAH 1.7 billion in personal income tax, up 16% year-on-year.
At the same time, Metinvest’s Ukrainian enterprises paid UAH 1.4 billion in corporate income tax in January-June 2024, up 26% compared to January-June 2023. Land payments increased by 7% to UAH 631 million and environmental tax by 22% to UAH 368 million.
Yuriy Ryzhenkov, CEO of Metinvest, stated that the group has overcome many challenges during the war, but many challenges are still ahead.
“Our efforts to rebuild our business to operate in the new environment and our ability to turn problems into opportunities have paid off – tax payments are growing. This is our contribution to supporting the economy of Ukraine and the regions near the frontline where the company’s enterprises operate. We allocate significant resources to help the army and civilians, continue to make plans for a peaceful future and are ready to participate in the post-war revival of the country,” the top manager emphasized.
As reported earlier, Metinvest almost doubled its tax payments to the Ukrainian budget in the first quarter of 2024 to UAH 4.2 billion. In 2023, the company paid UAH 14.6 billion to the Ukrainian budget.
“Metinvest is a vertically integrated group of steel and mining companies. The Group’s enterprises are mainly located in Donetsk, Luhansk, Zaporizhzhia and Dnipro regions.
The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.
Metinvest Holding LLC is the management company of Metinvest Group.
State-owned Oschadbank (Kyiv) has so far paid UAH 4.2 billion in income tax and UAH 0.7 billion in dividends to the budget based on the results of its operations in 2023 and plans to make another final payment of UAH 1.1 billion, the Oschadbank press service said at the request of Interfax-Ukraine on Wednesday.
“The budget will receive a total of UAH 6 billion from income tax and dividends, UAH 0.5 billion is taken into account in the calculations for previous periods,” the press service of the financial institution noted.
According to the finalized financial results, the bank earned UAH 6 billion in net profit last year, which, according to the bank, is the second highest figure in the market after PrivatBank.
As of March 1, 2024, Oschad ranked second in terms of total assets (UAH 376.4 billion) among 63 banks in the country.
Detectives of the Bureau of Economic Security (BES) are investigating the fact of tax evasion of more than UAH 1 billion by a well-known organizer of online gambling, the bureau said in a statement on Tuesday.
“The investigation has established that the company paid out UAH 4.5 billion in winnings to players, of which it failed to pay personal income tax and military duty totaling UAH 1.1 billion. These payments were recorded not as winnings, but as refunds, i.e. deposits, to individuals that were allegedly not used in gambling,” law enforcement officials say.
The BES does not disclose the name of the gambling organizer, but according to Interfax-Ukraine, it is the Cosmolot online casino, whose co-owner Arnulf Damerau recently told the Financial Times that allegedly corrupt officials in Ukraine’s law enforcement agencies and the presidential administration are trying to extort tens of millions of euros from him.
The BES adds that more than 5 million banking transactions are being analyzed, and the amount of damage caused to the state is confirmed, among other things, by the materials of the documentary audit of the State Tax Service.
“To ensure a comprehensive and complete investigation, detectives have already questioned the company’s employees, players and counterparties, conducted searches, sent numerous requests to banking and other institutions, and received a number of rulings on temporary access to things and documents,” the statement said.
According to the statement, as part of the criminal proceedings, the bank accounts of the company, which is still operating today, were seized, but the court ruling allowed it to make all necessary payments to the budget and pay wages.
“At the same time, at the time of the announcement of one of the rulings, the company’s officials transferred 100 million to the accounts of a counterparty, and these funds were subsequently arrested,” the release said.
The BES also states that the company’s officials have been obstructing the detectives in every possible way during the investigation, in particular, they have ignored the investigating judge’s decision to grant temporary access to documents, refused to provide information during interrogations, and concealed primary business documents.
“The pre-trial investigation is currently ongoing. The BES detectives continue to collect evidence that will be used both for forensic economic examination to confirm the amount of damage caused to the budget of Ukraine and to prove illegal activities,” the law enforcement officers said in a statement.
