Income tax bills will rise for many

INCOME tax bills will be dropping into letterboxes in the next few days and they will contain an unpleasant surprise for millions of taxpayers.

The avis d'impôt sur le revenu for 2012 will see an increase for many, due to the freezing of inflation-linked income limits, and families could also see a rise in tax due to changes in the quotient familial.

For 50,000 higher earners, a new tax band for those earning more than €150,000 per “part” will also mean a rise in tax.

Some observers say that 15 million people will face rises, but Prime Minister Jean-Marc Ayrault says it will be much less.

Whatever the final figure, some ministers have recognised that continual tax increases are not the way forward, with Economy Minister Pierre Moscovici admitting that he was well aware that citizens and businesses “had had enough”. Foreign Minister Laurent Fabius also warned that there were levels of tax that were too high.

Household budgets will come under fresh pressure in January when VAT levels rises from 19.6% to 20% and 7%-10% (although items rated at 5.5% at present will drop to 5%).

The head of the opposition UMP, Jean-François Copé, promised a “massive reduction” in taxes if his party is returned to power “to free the country from its chains”. He also said he would cut public spending by 10% or €130 billion.