French lawmakers made a series of changes to the government’s 2027 budget bill on Monday, 2 November, often voting against the government’s position. The amendments covered VAT on pay-TV, electricity and essential goods, as well as other taxes. The government is nevertheless expected to have substantial influence over the final version of the budget.
The Assembly removed a proposal to end the reduced 10% VAT rate for traditional pay-TV subscriptions, which would have brought them into line with on-demand platforms taxed at 20%. The government said the change would raise €400 million. The proposal had prompted objections from deputies across several political groups, amid warnings that it could lead to higher subscription prices and put pressure on broadcasters’ business models.
Lawmakers also approved a 5.5% VAT rate on electricity tariffs for end consumers, and backed the same rate for a list of essential food and hygiene products to be set by decree. Other adopted measures included VAT cuts or exemptions benefiting overseas territories, an increase in the financial transaction tax, and a ban on fuel suppliers passing on a planned kerosene contribution to customers.
The Assembly approved a government proposal to tax profits from motorway concessions, but in an amended form. The government also supported a measure allowing cognac producers to avoid cash advances, as the sector faces higher US tariffs, a Chinese surcharge on spirits and falling alcohol consumption.
The budget debate took place against a backdrop of weaker-than-expected economic figures. France’s statistics agency reported an initial estimate of a 0.1% contraction in GDP in the third quarter, while inflation continued to rise. Public Accounts Minister David Amiel argued that the budget’s deficit outlook had worsened during the debate, warning deputies that the public deficit had been increased by €1 billion per hour that morning.
The votes may not determine the final budget. A rejection of the revenue section is considered likely, which would send the bill to the Senate in its original form. The government could also use Article 49.3 of the Constitution or a budget ordinance, options that could allow it to set aside some parliamentary votes. A formal vote on the revenue section was scheduled for Tuesday.
Sources: Le Monde.