Less Households Pay Tax

Finance
Less households in France to pay tax

Less households in France to pay taxNew figures just released show that less than half of households paid income tax last year.

Only 47.5% of households paid tax as opposed to 2013 when 52.3% paid.

This is linked to a declining number of paying households overall despite numbers of actual households in France going up with 17.6million households paid income tax, down 1.6m in a year.

This is due to the tax reduction for lower income families that has been put in place by the Prime Minister, Manuel Valls last summer  and the effect is likely to be increased this year with the removal of the first band of income tax.

It is estimated only around 44% will pay this year, one of the lowest proportions over the last decade (in recent years it has varied from 56.8% in 2006 to 43.4% in 2009).

Despite the lower proportion of taxpayers in 2014, actual takings from income tax has increased by €2.9bn to €75.4bn and were up €10bn (15%) over just two years.

A total of 223,000 households made a demande gracieuse relating to income tax – a request for help with paying (by spreading out payments, or being let off all or part of the tax), which was slightly up on the previous year.

Takings from the ISF wealth tax were also up in 2014 to a record €5.2bn (from €4.4billion) – mainly due to a crackdown on wealth held abroad, especially in Swiss accounts. The number of ISF payers increased by 6% to 331,000.

As usual, however, the takings from both were dwarfed by those from VAT – which everyone pays – at €178bn.

The figures were from the annual activity report for 2014, published by the Direction Générale des Finances Publiques.

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