Thursday, November 17, 2011

Taxing Times

Sacre Bleu, it's a difficult time of the year in France. All the taxes come at once and with back to school expenses and Christmas looming, it's lean times chez tout le monde

Every household in France must pay taxe foncière ( similar to rates ) and taxe d'habitation ( similar to poll tax). For a pretty average house like ours, these two taxes can add up to 3000euros
Then you have your Income tax, Taxe Professional ( if you have a business, even if the business makes a loss), Social charges ( if you have any rental income , even if you make a rental loss), Professional Taxe Foncière ( even if you make a loss) . All these have to paid in October and November.

Not a great time of year then for Sarkozy to announce his new austerity measures. "The toughest budget since World War 11", France desperately wants to hold on to it's AAA rating and so Sarko is trying to show the other European countries that he too, can balance his books.
So what do these austerity measures mean for the average Pierre Soap in France?
VAT on restaurant bills will increase from 5.5% to 7%
Corporation tax will go up by 5% for those with a large turnover
Investment Income will the taxed more heavily
Spending will be slashed

In Perpignan , where the average wage per household is 1500euros per month, talk of austerity measures, particularly at this time of year, is a hard pill to swallow. People just cannot afford to tighten their belts any further. With a presidential election next Spring, Sarko is predicted to make changes to the tax structure and not the welfare system, which needs a complete overhaul, but is always an unpopular move for the voting public.
Whatever he does, he's going to be unpopular. No doubt there will be manifestations and strikes to follow..
Who would want to be a politician in these taxing times?

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