French National Assembly Unexpectedly Repeals Major 5 Billion Euro Industry Tax Amid Budget Debate
The French National Assembly unexpectedly repealed the 5 billion euro C3S industrial tax during the 2026 budget debate, marking a significant and surprising fiscal shift.
- • French deputies voted to repeal the C3S tax, a 5 billion euro burden on industry.
- • The repeal was unexpected and not intended by the amendment's proposer, Charles Sitzenstuhl.
- • A significant CSG increase on capital income was also approved to raise 2.8 billion euros by 2026.
- • The budget debate featured sharp political exchanges and health incidents among deputies.
Key details
In an unforeseen development during the 2026 budget discussions, the French National Assembly voted to repeal the Contribution de solidarité des sociétés (C3S), a production tax that generated approximately 5 billion euros and was considered a hindrance to industry. This repeal took place amid paused fiscal discussions on the Projet de loi de finances (PLF) and social security financing bill (PLFSS).
The amendment was introduced by Deputy Charles Sitzenstuhl from the Renaissance party, who later admitted that he did not anticipate its adoption. This unexpected repeal contrasts with other fiscal measures, such as a significant increase in the Contribution sociale généralisée (CSG) on capital income, approved earlier, which aims to generate an extra 2.8 billion euros by 2026.
This surprising parliamentary action occurred alongside heated debates on the intellectual and economic competence of deputies, highlighted by economist Philippe Aghion's criticism and subsequent responses by other political figures. Additionally, the budget session saw National Rally deputy Monique Griseti suffer a health episode requiring hospitalization.
The repeal of the C3S marks a major shift in the French fiscal landscape that could impact industrial competitiveness and budget revenues. While the future handling of this tax abolition remains uncertain, it reflects the contentious and fluid nature of the 2026 budget negotiations within the Assembly. The developments underscore ongoing tensions in balancing taxation, economic growth, and political strategy in France's budgetary process.