Thursday, December 29, 2016

The constitutional Council validates the budget, but criticizes its credibility – The Echoes

These are comments which will not fail to be exploited by the opposition. The constitutional Council has put in question, Thursday, the too great optimism of the draft finance law for 2017 the government. Without going so far as to press on the button of the atomic weapon (i.e. invalidation) that would have constituted a judgment of insincerity overall budget. The forecasts made available to ” do not allow to conclude that these assumptions are fraught with an intention to distort the broad outlines of the balance of the law of finance “, wrote the wise in their press release.

But their comments, unusually critical, cast doubt on the realism of the budgetary trajectory. Thus ” the assumptions for 2016 and 2017 may be regarded as optimistic, especially in regards to the deficit to 2017 “, they pointed out, before noting that a supplementary budget may be necessary.

This is not the first time that the forecasts of the executive are in question. The High Council of public finances was held in September, the deficit target for 2017 (2.7 % of GDP) unlikely. The european Commission had been more conciliatory, stating that this deficit would increase despite all of this under the bar of 3 % (to 2.9 %). Not enough, however, to silence critics of the right, who refused to even vote on this budget in the Senate. François Fillon puts forward the legacy of François Hollande to justify a forecast of a deficit of between 3.5% and 4 % in 2017 in his presidential programme.

beyond this very sensitive issue politically, the constitutional Council has validated the essence of the project of finance law for 2017, and the collective budget for 2016. First, it rejected the grievances of the members of the opposition on the levy to the source. This is not, for all that he has given a blank cheque complete this reform, the flagship of the executive : the Council has not as well validated as the four points of the text (those that were contested), leaving the door open to further action if this legislative change is very complex just to create new grievances. To be clear, reform is underway, but it will still be possible to challenge it in the coming months if new problems were to emerge.

Arm wrestling

Another decision is notable, the constitutional Council has censored the article establishing a ” Google tax “. This provision was the subject of a tussle between the majority and the government, who never wanted hardly, considering it to be of no effect. It was to strengthen the taxation of “profits diverted” made by multinationals on their activities in France. The wise have torpedoed the measure on the grounds that the tax would have been based on the controls conducted by the tax administration, which would have been a way of ” choosing the taxpayers, “ made impossible by the Constitution.

Other action censored : the fine is not capped for those not denouncing it not a participation in a circuit of VAT fraud. Same fate for a new tax that was aimed specifically at the legal professions (notaries, court clerks, bailiffs, etc).

R. Ho., Les Echos


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