This is the Wednesday that is unveiled the finance bill 2017. This budget, which includes a passage under the bar of 3% of public deficit, is already pinned by the High council of public finances and the opposition.
This is D-day for the government. It presents on Wednesday its draft finance law (PLF) for 2017, the last of the quinquennium of Francois Hollande. The project will be presented first to the council of ministers. And then the government will attempt to convince the parliament of his “serious budget”. The budget will be discussed during the autumn.
The main lines are already known. One of the measures emblematic being the formalization of the transition to the deduction at source of tax on income at January 1, 2018. Michel Sapin, the minister of Economy and Finance, also presented a week ago the forecast, which will be included in this budget bill. It foresees a public deficit at 2.7% of gross domestic product (GDP) in 2017, after 3.3% this year, a growth of 1.5% in 2016 and 2017.
It is highly likely that this last project of the budget of the quinquennium to be amended in the course of the year 2017, via an amending budget, to take account of the results of the presidential and parliamentary elections. For all that, the challenge for the government, which must prove that its economic scenario for next year holds the road against the storm of criticism that befell him even before his official presentation.
goals “improbable”
The first salvo was fired in June by the Court of Auditors. In a report, the latter considered as “significant risks” weighed on the expenditure of the State, suggesting that the target of a public deficit below 3%, as promised to Brussels, was compromised. The same conclusions have been made by the High council of public finance (HCFP) which in the opinion, expected on Wednesday, has been leaked yesterday. According to this body, chaired by the boss of the Court of Auditors Didier Migaud, the return of the public deficit to 2.7% of GDP next year is “unlikely” due to the risk of slippages on the expenditure side.
On the eve of the presidential election, François Hollande, in fact, distributed “gifts”. He promised a tax cut of one billion euros for the middle class, a plan of 5 billion euros for the companies via a strengthening of the tax Credit competitive employment (CICE) and a lower targeted corporate tax. Measures plus of new spending in favour of employment, farmers, education, or safety.
The assumption of 1.5% growth in 2017, adopted by Bercy, tends “to deviate from the principle of caution”, writes the HCFP. A notice that seem to share the OECD and the IMF expect, respectively, for France, a growth of 1.3% and 1.2% for next year. The opposition, particularly the candidates for the primary from the right, also displays his disagreement. “To say that the deficit will be 2.7% in 2017, this is bogus!”, thus mocked François Fillon.
tax Tips
But the government believes in it. In a reaction transmitted to the AFP, Michel Sapin assured that the “government’s determination to allow France in 2017 to pass under the 3% deficit of public finances”. To compensate for many expenses, Bercy provides for additional efforts on the side of the Safely (1.5 billion euros), but also new savings on the interest charges ($ 1.2 billion) and the money coming in stronger than expected in the fight against tax evasion.
The department also focuses on tax tips. The use of the SIEC to replace the abolition of the C3S (social contribution of solidarity of companies), will allow the State to save 3.3 billion euros, the tax credits for the year 2017 due to…in 2018. Similarly, the amount of the final installment payment of corporation tax, paid in December, will be increased for large companies. This will allow you to drag on to 2017 to nearly 400 million euros that would normally have had to be affected the following year.
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