During examination of the social security budget bill for 2009, the French National Assembly ratified measures aimed at increasing tax on insurance and mutual companies, adopted plans to levy transport charges on employers, and rejected proposals to raise tax on stock options and pensions.
From next year, profits of complementary health insurers, such as mutual, provident and insurance companies, will be subject to a 5.9% tax, marking a significant increase from the current 2.5% and generating an estimated EUR1bn.
According to Budget Minister Eric Woerth, this increase reflects the steady rise in long-term health conditions, including diabetes and high blood pressure, covered by a compulsory 100% health insurance charge, and allowing insurers to save an approximate EUR600m a year.
Yves Bur, a spokesman for the government, argued that, given available funds of EUR17bn, the companies involved would be able to bear the additional costs.
Among other initiatives supported by the government and agreed by parliament, are a measure to subject golden handshakes in excess of EUR1m to social contributions. The levy will apply to the whole amount and not just after the first EUR200,000, as is the case at present.
A controversial government proposal to levy transport charges on employers - “la prime transport” - was also adopted by the National Assembly. In a bid to ease commuting costs, from 2009 employers will be obliged to contribute to 50% of public transport costs incurred by staff. Currently applying only in the Ile-de-France region, the initiative is due to be extended to the whole of France from next year and will include the costs of hiring bicycles.
From next year, the tax on drinks with an alcoholic strength of over 25% is set to increase to 23%. This tax, unchanged since 1993, is set to generate in the region of EUR80m.
The National Assembly rejected an amendment aimed at increasing the tax burden on stock options and retirement pensions.
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