A new “special law” has been unanimously passed by the National Assembly, granting the government authority to impose taxes and borrow funds to support the State and Social Security amidst budgetary delays for 2025. While the decision showcases political consensus, it has sparked controversy, particularly regarding tax adjustments for inflation. As the government faces limitations on funding essential services, calls for urgent tax reforms have emerged to address expiring credits and support various sectors, setting the stage for future fiscal discussions.
A Special Law for Financial Flexibility
In a significant move, the National Assembly has unanimously passed a “special law” that empowers the government to impose taxes and borrow funds to sustain the State and Social Security. This unanimous decision, made by all 481 voting deputies, comes as a reaction to the political stalemate that has hindered the approval of the budget for 2025. With the Senate set to review the text on Wednesday, the focus is now shifting towards the upcoming budgetary challenges post-holidays. While this consensus is noteworthy, it has not been without its share of controversy.
Political Tensions and Future Implications
Opposition members expressed their disappointment when Assembly president Yaël Braun-Pivet deemed amendments aimed at adjusting the income tax scale to inflation as inadmissible. Relying on the Council of State’s opinion, Braun-Pivet argued that the special law was not the correct vehicle for such indexing, which could divert from its intended purpose. However, dissenting deputies believe the Constitutional Council should have the final say once the law is enacted. Clémence Guetté from LFI remarked on social media, criticizing the government’s approach to taxation following the political censorship.
As the debate intensifies, the future of the budget remains uncertain. The current law allows the government to adjust taxes based on last year’s rates, but it only permits minimal spending necessary for public service continuity. There are concerns that without inflation indexing, an estimated “380,000 new households” may become subject to taxes, a situation that could be rectified in the next budget or through other legislative measures early in 2025. Meanwhile, the government is restricted in its ability to increase funding for certain ministries, which may impact vital services.
Looking ahead, the general rapporteur for the budget, Charles de Courson, along with Eric Coquerel, has urged the Prime Minister to introduce urgent tax provisions that foster consensus. They emphasize the need to address expiring tax credits, social exemptions for tips, and support for farmers. Their call for action aims to ensure that these proposals are debated as soon as the Assembly reconvenes on January 13, setting the stage for a more stable financial outlook as the country navigates its fiscal responsibilities.