the mayors consider themselves insufficiently compensated by the State

“The government commitment is not respected”: the Association of Mayors of France (AMF) denounced Thursday in a press release insufficient financial compensation from the State to the municipalities after the abolition of the Contribution on the added value of companies (CVAE).

The commitment to compensate the euro near the disappearance of this production tax is far from being kept, annoys the AMF. While some communities will see an increase in the product collected between 2022 and 2023 under the CVAE, it is nonetheless lower than what should have been collected in 2023 in the absence of reform, continues the association.

Over the years 2023 and 2024, the AMF estimates the cumulative loss of local authorities at 1.3 billion euros. After having already been reduced by half at the end of Emmanuel Macron’s first five-year term, the CVAE is intended to disappear completely by 2024, which represents a loss of tax revenue of eight billion euros, distributed between 2023 and 2024.

A 2021 exclusion for the calculation?

To avoid a deadweight loss for municipalities and intermunicipalities, which collected most of the CVAE’s revenue, the government has undertaken to pay them a fraction of VAT.

But the mayors criticize the government for the way it calculates the compensation. The government’s choice to calculate the base compensation on the average of the years 2020-2023 clearly penalizes the municipalities, they regret in the press release published Thursday. The year 2021, which recorded an exceptional drop in the CVAE due to the health crisis, must be excluded from this calculation, add local elected officials.

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