the income tax scale will soon be indexed to inflation

The Ministry of Economy and Finance. laurencesoulez /

To mitigate the effects of rising prices on taxpayers, the government has decided to revalue the different tax brackets.

Good news for taxpayers. While inflation should reach 5% in 2023 according to the latest INSEE forecaststhe government intends to absorb this shock on the tax sheet of the French. According to information from echoes , confirmed at Figaro, Bercy, in full preparation of the finance bill 2024, decided to index the scale of income tax on the evolution of the rise in prices. In other words, the tranches will be revalued to take inflation into account.

If the level of this enhancement has yet to be fixed, it should be around 4.9%. While this increase remains lower than last year’s 5.4%, it is greater than previous readjustments when inflation was lower. Concretely, thus, the minimum tax threshold will no longer be set at 10,778 euros of annual income. This level will be increased according to the price increase. Ditto for the following levels.

Read alsoBudget 2024: “The tax curse”

For the executive, indexation will allow many French people, non-taxpayers, not to become taxable. And will prevent current tax payers from seeing their taxes increase. An important decision, while many households remain crushed by inflation. For the government, this is not a trivial decision: it is depriving itself of several billion in tax revenue next year. But while the executive had to deny all rumors of increased taxes or levies, not acting would have been politically tricky to say the least.

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