In 2021, France remained the champion of the euro zone in mandatory levies (taxes, taxes and social security contributions). According to a study carried out by the specialized site Fipeco published this morning by Les Echos, the set of taxes, fees and social security contributions collected last year represented 47% of GDP. Within the European Union, only Denmark outperforms France in this area with a statutory fee rate of 48.8%.
The gap between France and its neighbors has narrowed since 2017
But the most important thing about these new figures is the trend that they clearly show. Downward trend on the French side while in most of its neighbors the weight of mandatory levies increases. In fact, as of 2020, France had a mandatory tax rate of 47.5%.
However, given this drop of half a point, its first economic partner, Germany, went from 41.5 to 42.4%. Therefore, the gap between the two banks of the Rhine narrowed again last year. The gap with the average for the euro zone also narrows, going from 5.9 to 4.8 points. And the comparison with 2017 is even more striking.
Fiscal convergence is no longer an empty word. But the comparison made by Fipeco also makes it possible to measure the differences that persist in the fiscal strategies of the EU Member States. Thus, contrary to what some taxpayers think, France is below average in terms of taxation on household income (IR and CSG combined). In 2021 they represented 9.4% of its GDP, while the average in the euro zone was 9.7%.
Higher social security contributions in Germany
The comparison with Germany (9.6% of GDP) shows that not only are incomes taxed less on average in France, but social security contributions affecting their wages are also lower there (16.8% vs. 17.6% of GDP). In fact, France derives its uniqueness from the taxation that weighs on the products and services that its consumers buy, starting with VAT. They reached 12.3% of GDP last year, compared to 10.1% in Germany and 11.1% on average in the euro zone.
The gap is even greater for the other taxes of which France is champion: those that weigh on its production. They weigh 4.5% of GDP, where Germany is content with 1% and the euro zone with 2.3%. But these are also the ones that have dropped the most and the Government intends to continue lowering them to reduce the distance with our neighbors.
Source: BFM TV
