Is France Planning a VAT Rate Hike to Address Its Growing Budget Deficit?

• France is considering a VAT rate increase to address its high public deficit and a €10 billion VAT shortfall.
• EU law allows France to raise its VAT rate above the current 20%, which is lower than some other EU countries.
• Raising VAT is attractive due to its high revenue potential and ease of implementation.
• A 1% VAT increase could generate about €6.5 billion but would raise consumer prices and disproportionately affect lower-income households.
• The government denies any current plans to raise VAT, but the debate is ongoing and politically contentious.

Source: meridianglobalservices.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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