Main spending cuts and tax increases in France’s 2025 budget

October 11

France’s government presented on Thursday its 2025 budget aimed at plugging a gaping hole in the public finances with 60 billion euros ($65.68 billion) worth of tax hikes and spending cuts.

The following are the main measures:

SPENDING CUTS

The French government will cut 2,200 jobs. The headcount for teachers, in particular, will drop, along with the expected drop in the number of pupils, government officials said.

France will cut its foreign aid budget by 1.3 billion euros.

Subsidies for apprentices and other jobs will be cut by 2.1 billion euros.

Green subsidies, in particular those for insulation and the purchase of electric cars, will be cut by 1.9 billion euros.

The planned increase of pensions due to inflation on Jan. 1 will be postponed by six months, saving 3.6 billion euros.

TAX HIKES

Big companies

France’s largest companies with revenue exceeding 1 billion euros will pay an additional tax on their profits. The tax is expected to raise 8 billion euros and, if approved, would affect 440 companies.

Wealthy individuals

Individuals earning more than 250,000 euros a year will see a temporary increase in income tax, and a minimum tax of 20% will be introduced for those households only, to prevent the use of tax loopholes, raising 2 billion euros per year.

Air transport

France will raise a tax on airplane tickets and private jets.

The amount, currently being discussed with the industry, will be added in an amendment to the budget bill during parliamentary debates.

France currently has a tax of 2.6 euros per flight, lower than in Britain or Germany, government officials said.

Utilities

Power utility EDF, which was nationalized previously, will increase its dividend to the French state by 2 billion euros.

A tax on electricity, which had been cut to almost zero during the energy crisis of the past two years, will be raised back to “slightly more” than what it was before the war in Ukraine, bringing 3 billion euros, government officials said.

The tax increase will nonetheless result in a drop of around 9% of power bills for consumers, when taking into account the fall in wholesale power prices, the officials said.

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