Production taxes: France ranks among Europe's "worst performers

For the first time, a study by the Institut Montaigne, an independent think-tank described as liberal, provides a precise ranking of different European Union countries according to the weight of production taxes. France ranks second among the countries with the highest production taxes.

Production taxes seen as an obstacle to competitiveness

Back in 2019, the Conseil d'analyse économique (CAE) called for a reduction in production taxes, which include various taxes on wages, sales, property and added value.

According to the CAE report, these taxes are a drag on France's competitiveness, partly explaining " the relative atrophy of the French productive sector and, in particular, of VSEs and SMEs ".

The sales tax known as "C3S" is considered by the CAE to be the most restrictive to competitiveness, as it weighs on every stage of production.

More than 2 and a half years after this memo, a study by Institut Montaigne entitled "Baromètre européen des impôts de production 2022" (European Production Tax Barometer 2022), carried out with the help of consulting firm Mazars, reveals for the first time the precise weight of production taxes in different European countries.

Lower production taxes to promote reindustrialization

As the study points out, France was already placed " among the 'bad pupils' of the European Union" by data from Eurostat, the European Commission's statistical office.

In fact, according to Eurostat, France leads the way " in absolute terms " among European countries with the highest production taxes, at over 120 billion euros, while Germany's figure is just 27 billion euros. These taxes represent 5.3% of France's GDP, second only to Sweden (10.3%).

The Institut Montaigne study arrives at the same ranking, albeit with more precise data. According to this European Production Tax Barometer, " in absolute terms, France is in first place, with production tax revenues of over 100 billion euros, more than four times higher than in Germany and twice as high as in Italy ".

According to data from the Institut Montaigne, production taxes represent 4.4% of France's GDP, putting it in second place behind Sweden.

Victor Poirier and Lisa Thomas-Darbois, the authors of this study based on production taxes in 11 countries in 2020 (France, Sweden, Italy, Spain, Portugal, the UK, Belgium, Poland, Germany, Switzerland and the Netherlands) note that, with the exception of Sweden, France and Italy, " the weight of production taxes rarely exceeds 2% of GDP ". In the Netherlands, Switzerland, Germany and Poland, these taxes do not even exceed 1% of GDP.

Industrial and exporting " companies are the first to be affected by production taxes. According to the Institut Montaigne, France's " reindustrialization and economic sovereignty ", which have emerged as key themes in the election campaign, can only be promoted by lowering these taxes on companies.

In fact, according to the authors of the study, " lowering taxes on production in a sustainable way is one of the main solutions for restoring the gains in competitiveness needed to strengthen French industry ".