Employers fear the next government’s tax decisions

For months, employers, particularly those of small and medium-sized businesses, have been worried about possible tax increases or reductions in tax exemptions.

Will exceptional or long-term efforts be required of certain companies? The government of Michel Barnier, whose formation seems imminent, will have to make numerous tax decisions. The governor of the Bank of France, Villeroy de Galhau, recommends “lift the taboo” regarding tax increases. And for the bosses, lifting this taboo is one more worry.

The employers have been saying for months that the supply-side policy implemented in recent years should not be touched. A policy that is rather favorable to businesses with reductions in production taxes. All business leaders have in mind the elimination of the contribution on the added value of businesses (CVAE). A local tax whose elimination was promised by Bruno Le Maire but postponed several times. Technically, it is planned for 2027.

The Medef and the CPME fear that the state of public finances and the need for revenue will undermine this promise. However, Michel Barnier himself has acknowledged this: France remains the country “where the tax burden is highest.” He is therefore expected to make a difference by employers’ organizations on this issue.

There are also these threats on certain hiring aids, in particular apprenticeship aids which have been heavily subsidized since 2020. They are accused of causing “windfall effects” at the bachelor’s or master’s level. Already in the sights of the outgoing executive, they will be in that of the next government. “We wonder what we are going to do”explains Bernard Hibert, who runs a staircase manufacturing company with 15 employees, four of whom are apprentices. “The first year of apprenticeship, we invest, that is to say we don’t earn money, we lose it because we do our training work.”

“If we don’t have stability, we’ll fall back into the old ways we’ve known, meaning that at some point, we’ll stop recruiting as many apprentices and we’ll have to wonder.”

Bernard Hibert, owner of Escaliers Hibert

to franceinfo

There is also the debate around salaries, and in particular low salaries, which is worrying. Among the options on the table of the new Prime Minister to “de-micardize” work, there is the reduction of certain exemptions from contributions on salaries around the minimum wage.

One less boost that risks weighing on certain sectors, warns Guillaume Richard, boss and founder of Ouicare, a personal services group: “In my profession, salaries generally range from the minimum wage to 10-15% above the minimum wage. If we lower the level of social security contribution exemptions, if we increase my salary costs, it will force me to increase my prices. However, my number one competitor is undeclared work, which does not have these constraints. It is as if you had a race where you have to carry a weight that is much greater than your competitors.”

Higher prices, fewer customers, and consequently fewer employees. This is what threatens this boss, whose group employs 20,000 people in France.