French government considers scrapping retirees' tax break in 2026 budget

Paris [France], April 20 (ANI/ WAM): The French government is considering the elimination of a 10 per cent tax reduction granted to pensioners on their annual income declarations, as part of its efforts to achieve Euro 40 billion in savings under the 2026 budget plan.
Amelie de Montchalin, Minister for Public Accounts, did not rule out the measure in remarks published today in Paris, stating that "age should not be a criterion for determining one's level of tax contribution." The move forms part of broader efforts to reduce the national budget deficit, which reached 5.8 per cent of GDP in 2024.
The minister added that "social partners are discussing all topics related to pensions in ongoing consultations, including the tax privileges granted to retirees."
The tax reduction, first introduced in 1978, was intended to create parity with working individuals who receive a similar 10 per cent deduction to account for professional expenses. However, the current debate questions the relevance of this benefit in light of the financial pressures facing the state.
Gilbert Cette, President of the French Pensions Advisory Council, voiced support for the removal of the tax break earlier this year, a stance later echoed by Patrick Martin, President of the French employers' organisation Medef. Martin described the application of a "professional expenses" deduction to retirees as "illogical" and "absurd", noting that the measure costs the government approximately Euro 4.5 billion annually.
In contrast, French pensioners' unions have strongly opposed the proposal. In a statement issued in March, they argued that the tax break for retirees has no connection with the deductions granted to workers for professional expenses. They warned that eliminating the benefit would increase the tax burden on around 8.4 million retirees--nearly half of France's retired population--and stressed that not all affected individuals would be financially well-off. (ANI/ WAM)