Government deficit, social VAT, CVAE… Medef president believes France should save “in the right place”

He gets to the point and criticizes the government. “We are concerned about what we are hearing here and there,” said Patrick Martin, president of the French Companies Movement (Medef), this Sunday, who faces the risk of seeing tax cuts benefiting companies under question for budgetary reasons. . “Economic activity is slowing,” he criticized. “The growing deficit accurately reflects the economic downturn. »

“Business value added contribution was due to be completely abolished in 2023. Then we were told that this would be extended to 2023-2024. Then it would gradually die out by 2027,” the leader recalled in an interview with the Sunday Journal. He said “further doubt” about the timetable for repealing the tax would “undermine the confidence we can place in the word of the state.”

“Look for savings”

In his opinion, France should “look for savings,” but do it “in the right place.” “That is, for the operating expenses of government functions,” said Patrick Martin. Likewise, the Medef president called for “a solution to this problem of public finances that has continued to worsen for decades,” but moving away from “classical logic.” “budget annual income” “.

After announcing on Tuesday a government deficit of 5.5% of gross domestic product for 2023, well above the 4.9% originally planned, the government is looking for savings. Economy Minister Bruno Le Maire earlier this week rejected any tax increases, even confirming on Tuesday the planned abolition of the CVAE and tax cuts for some households. The minister then confirmed on Saturday in an interview with Ouest-France that he would not touch on the treatment of chronic diseases, but mentioned a new form of contract for workers over 55 years of age.

CPME, the second employers’ organization, assessed this Thursday as “positive” the government’s desire not to raise taxes and expressed hope that the commitment to completely abolish the CVAE by the end of the five-year period will be fulfilled. “The fight against the repeal of the CVAE, which puts enormous pressure on the industry, will contribute to an increased risk of exit from the industry compared to our competitors,” Patrick Martin further confirmed this Sunday.

Also answering the question about the possibility of introducing a social VAT, which would allow transferring part of wage costs to VAT, Patrick Martin does not consider this solution effective for restarting the economy. “French companies still incur 60 billion more in production taxes and the same amount in social contributions as the average European company. If we want to be competitive and attractive, this is what we have to do,” he said. “It is completely illogical and even unfair that companies and therefore their employees bear the majority of the costs of French social production.”