It was January 1, 2019. After years of hesitation, the withholding of income tax came into force. A long story. Already, before the Second World War, an experiment of “stopping at the source” had been set up to be abolished a few years later. Since then, like a sea serpent, the idea of a withholding mechanism had returned regularly.
The opening, in the 1970s, of an option for the monthly payment of tax and, more recently, the dematerialization of exchanges between taxpayers and the tax administration, the introduction of declaration and then payment by Internet or even the introduction of the pre-filled declaration have gradually created a context conducive to the introduction of the withholding tax. In 2016, the project presented by the government as part of the finance bill for 2017 finally instituted it.
However, its realization is taking a little longer than expected. While some fear the establishment of a “gas plant”, while others fear a devastating effect on the psychology of households paying income tax and who will experience a reduction in their wages, within of the government, a postponement to a few months of its establishment cannot be ruled out.
Individualization of the rate
In 2023, these final hesitations seem from another time. Without notable malfunctions, the deduction at source of income tax has become widespread. And the system has gradually become more sophisticated, in particular allowing certain tax credits to be taken into account.
What hides this apparently positive balance sheet? What changes has withholding tax brought to our daily lives? Have taxes become painless? If the generalization of the withholding tax was done without a hitch, not sure that most French people understood all of its subtleties.
What are the points to improve? Already, the Prime Minister, Elisabeth Borne, has announced that from 2025 the tax withheld at the base on wages will, by default, be individualized within couples. But this progress will not solve all the problems of inequality in the face of tax within the couple. Shouldn’t the functioning of the family quotient, which serves as the basis for calculating tax, be modified to take account, in particular, of changes in society?
More generally, what future for income tax? Are we heading towards a merger of income tax and the generalized social contribution? These are some of the questions that participants will answer. first Tax Meetings that will organize The worlde and the Cercle des fiscalistes Tuesday, April 11, from 6 p.m., in the auditorium of the Worldin the 13e Parisian district.
This will also be an opportunity for you to discover the main new features you need to know to properly complete your next tax return. A free event on registration by clicking here.