EU: France’s new government reportedly mulls higher taxes on big companies

France is considering higher taxes on large companies as it tries to get its public finances back on track, Le Monde reported Sunday.

The new government led by Prime Minister Michel Barnier is working on an exceptional, temporary tax on the profits of big corporations, as well as a new tax on share-buybacks, according to plans by the French economy ministry seen by the French daily.

Since his appointment as prime minister, Barnier has hinted at the need for more tax fairness on top of spending cuts to address France’s budget problems — a move that earned him criticism from the camp of French President Emmanuel Macron.

The so-called exceptional contribution on the profits of big companies would consist in raising from 25 percent to 33.5 percent the tax rate on profits of companies with a turnover above €1 billion, according to Le Monde.

The measure would impact around 300 companies and could bring to state coffers around €8 billion a year, according to the report. It would bring the tax rate for those companies back to the level it was before Macron lowered it in 2017 when he came to power.

The new tax on share-buybacks would target companies that buy their own shares on the market to reduce the number of shares and, as a consequence, raise their value. Major French groups like BNP Paribas, LVMH or TotalEnergies have bought their own shares, a practice criticized by Macron himself last year. The new tax could bring in around €200 million.

Barnier’s government is under increasing pressure to cut France’s massive public deficit — the difference between how much a country’s government spends and how much it receives in taxes — which this year could reach more than 6 percent of the country’s gross domestic product (GDP).

France faces a so-called excessive deficit procedure in Brussels for overspending last year. The new government will send Brussels a trajectory for bringing its deficit down and avoiding a fine before Oct. 31. Barnier, who is set to present his budget plans for next year to the French parliament by Oct. 9, is expected to give more clarity on his program in a speech to the French parliament on Tuesday.

Other budget measures include widening the scope of an existing tax on polluting cars and modifying an existing tax advantage for those who rent furnished accommodation, including via Airbnb, Le Monde reported.