Philippe confirmed in an address to lawmakers earlier this week that the government would exempt any non-property related wealth from the country’s wealth tax.
France currently imposes an annual wealth tax of 0.5% starting on assets over €900,000 (£762,000, $990,000), increasing gradually to a top rate of 1.5% to anything over €10m.
Coupled with some of the world’s highest rates of income tax (the top rate is 45%), this has led to an exodus of the nation’s wealthy – with latest figures showing that around 12,000 millionaires left France in 2016.
However, reforms to the wealth tax – a key campaign pledge of France’s recently elected president Emmanuel Macron – will not take effect until 2019. The government also plans to gradually cut the corporate tax level to 25% by 2022 from 33.33% today.
France will also introduce a flat tax of about 30% on income drawn from savings, from the current level of up to 50%, Philippe confirmed.
The prime minister said he still planned to cut taxes by €20bn a year by the end of Macron’s presidency in 2022, adding the state would have to find other ways of raising revenue.
Austerity programme
Philippe’s strict road map comes as France’s public spending watchdog recently warned that deficit risked exceeding the EU limit of 3% of gross domestic product this year.
Last week, the Cour des Comptes said the deficit target of 2.8% of gross domestic product set by the previous socialist government was now “out of reach”, predicting a deficit of 3.2% in 2017, unless the government found €4bn in new savings this year.
