Public deficit: 5,5% the time of reckoning has arrived… for a social VAT with no effect

Based on this observation, and a compromised state of our public finances despite a record tax rate within the European Union, Bruno Le Maire put forward the idea of ​​a “social VAT” in the form of a transfer of part of the financing of social protection to consumption, accompanied by a reduction in the related contributions on pay slips. An idea likely at first glance to excite large exporting companies but potentially and probably harmful for local companies representing 98% of French companies, 6 million workers and nearly 33% of GDP.

For Marc Sanchez, Secretary General of the SDI (Union of Independents and VSEs): “The Minister of the Economy finally and fully agrees with the observation of the SDI and many others, according to which social charges weigh heavily on the competitiveness of our companies. Gabriel Attal made a striking demonstration of this during his general policy speech by indicating that an employer had to spend €238 for, ultimately, a net gain of €35 before tax for the employee. However, while this observation is common to all companies regardless of size, social VAT produces clearly differentiated effects depending on the size of the said companies. If exporting companies will gain a competitive advantage through costs, VSEs will be subject to the pressure of higher prices (in an inflationary context, already marked) on the national territory and will themselves have to increase their prices without generating any additional margin for investment, employment, payment of Covid charges (PGE, URSSAF) without forgetting the remuneration of the company manager when this is still possible, which is certainly not the case for a good part of them Right now. As for employees, this operation will at best lead to a stagnation in their purchasing power and will not extinguish wage demands in the face of renewed inflation. We fully understand that the government is looking for savings in all directions by promising that each action represents a solution in itself: €60 billion through simplification; €60 billion (+5 points) through social VAT; €10 billion in budget cuts;… The whole thing gives the feeling of action without anticipation and after announcements on a growth rate reviewed and corrected by everyone. At this stage, however, it is clear that our VSEs will refuse to accept that the only solution consists of an increase in direct or indirect taxes and duties and are insistently demanding a Copernican revolution in state and local government spending. »