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France

France risks ‘social explosion’ over high taxes

© Photo: AFP

Text by Tony Todd

Latest update : 2013-11-14

In a damning secret report leaked to the press on Thursday, regional officials have warned the government that France risks civil unrest over anger at continued tax hikes. France is the second-most taxed European country after Belgium.

France is on the verge of a “social explosion” over ever-increasing taxes, regional officials have warned the government in a private briefing that was revealed Thursday by conservative daily Le Figaro.

The report, compiled by France’s prefects (regional officials responsible for policing and civil administration) at the end of October, said French society was “rife with tension, frustration and anger” over seemingly endless hikes in taxes as ordinary citizens’ spending power continues to plummet.

France is the second-most taxed European country after Belgium. Much of it is paid through social charges (income tax is relatively benign) which the French have been happy to contribute in return for decent public services and an unemployment safety net.

But patience is wearing thin. New levies, imposed as the government tries to rein in soaring public debt, risk sparking civil unrest, as seen last month in Brittany over a new green tax on heavy goods vehicles, the prefects warned.

'Fertile territory for social explosion'

The government was forced to cave in and “suspend indefinitely” the so-called “eco-tax”, which was due to go into effect in January 2014, after tens of thousands of farmers, hauliers, fishermen and small business owners protested in demonstrations that turned violent.

In the report, the prefects said that roadside cameras installed across France to monitor traffic for the new tax had become symbols of fiscal oppression, and demanded that they be “removed before they are all destroyed”.

But public anger extends well beyond the new green tax, they warned, insisting that without a sea-change in the country’s economic prospects, especially for small businesses, France could expect more trouble.

"A progressive roll-call of bankruptcies and forced redundancy plans is having a marked effect, they wrote. “And as the bad mews mounts up, there is an atmosphere of pain and despondency. There is a lack of hope for the future, and this is fertile territory for a social explosion in France.”

French President François Hollande's Socialist government is set to impose an extra three billion euros of taxes in 2014, through measures including raising VAT to 20 percent and a new 75 percent tax rate for the country’s top earners (on incomes over one million euros), pushing France’s tax take to 46.5 percent of the economy.

Date created : 2013-11-14

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