Why France has the highest taxes in Europe – Explained

2023-11-19 12:38:28

France is the country in Europe where we pay the most taxes. This is what emerges from the figures published by Eurostat for the year 2022. The compulsory withholding rate is 48% of national wealth. This is 6.1 points (compared to 4.8 points the previous year) more than the average among European neighbors.

The six points more represent no less than 125 billion euros. In other words, in France, we collect 125 billion euros more than in our European neighbors. This is the highest level and a fairly consistent gap compared to the euro zone and the entire European Union.

But how can we explain this gap? Does France impose excess taxation? This is explained more by the taxes that weigh on businesses than by the taxes that weigh more heavily on households, first and foremost the famous production taxes constituting a set of taxes on salaries, on land, on turnover. , etc. explains Emmanuel Lechypre, editorialist on BFM Business.

French companies pay 60 billion more than their European competitors, as they also pay more in social contributions to the tune of 50 billion euros. On the other hand, the taxation of profits is comparable to that of other European countries.

Unlike businesses which pay more, households pay less compared to other European countries

On the other hand, on average, French households are not as bludgeoned in this area. Social contributions, for example, those of employees, craftsmen, retirees, are lower in France than in Germany in particular or than in Europe in general. German households pay 60 billion more in social security contributions than in France. For income tax, in the strict sense, in France, we also pay much less than our European neighbors. Basically, the French are mainly penalized by the taxes imposed on expenses. This is the case for VAT, higher than in the rest of Europe, but where we pay much more is on fuel, tobacco and alcohol in particular, explains Emmanuel Lechypre.

“In 2022, the country experienced high inflation, due in particular to the rise in energy prices. In France, energy products are taxed much more than our European neighbors with the internal consumption tax on products energy (TICPE), as well as VAT, TICPE. This allowed the State to garner significant tax revenues”, confirms economist François Geerolf, who puts this development down to “cyclical circumstances”.

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