French Fiscal Policy Faces Sharp Political Critiques Amid 2026 Budget Debates
France’s 2026 budget debates spark critiques of pension reforms, new digital taxes on tech giants, and controversial tax measures.
- • Gérard Larcher criticizes Macron's pension reform suspension as a sign of France's reform inability.
- • Finance Committee approves a hike of the digital services tax from 3% to 15% targeting major US tech firms.
- • A parliamentary voting error led to the accidental repeal of a tax on holdings.
- • The 2026 budget includes a freeze on the income tax scale benefiting mostly lower income households minimally.
Key details
As the 2026 budget preparation intensifies in France, significant critiques and reform proposals have emerged regarding the country's fiscal policies. The French Senate President Gérard Larcher condemned President Macron's suspension of the pension reform law, labeling it indicative of France’s "inability to reform," a setback for Macron's reformist legacy. Meanwhile, former Overseas Minister Manuel Valls criticized his exclusion from the government, suggesting internal inconsistencies and a lack of genuine renewal in the cabinet. Additionally, Deputy Charles Rodwell highlighted pension payments France must cover due to Algeria's refusal under old bilateral agreements to pay pensions to thousands of its citizens, underscoring an economic burden.
On the taxation front, the Finance Committee approved a major amendment significantly increasing the digital services tax from 3% to 15%. This target specifically the GAFAM companies (Google, Apple, Facebook, Amazon, Microsoft), now subject to levies only if their global revenue exceeds €2 billion, up from a previous €750 million threshold. Deputy Jean-René Cazeneuve from Renaissance projected this tax could generate several billion euros, with broad political support including calls for reciprocal measures against U.S. tariffs.
Concurrent with these developments, Parliament prepares to scrutinize the fiscal portion of the budget, amid expectations of numerous tax amendment proposals. Notably, a voting mishap led to the inadvertent repeal of a tax on holdings, with prominent deputies such as Éric Coquerel accidentally supporting it. The budget's freeze on income tax scales has been described by Economy Minister Amélie de Montchalin as providing minimal relief for many households but posing a greater demand on wealthier ones.
These events highlight the polarized debates over fiscal responsibility, equity, and reform efficacy shaping the French government's economic strategy for 2026.