French Senators Vote No To Double Health Insurance Tax

by Ulrika Lomas, Tax-News.com, Brussels

11 November 2011

Within the framework of its examination of France’s 2012 social security bill, the French Senate, with its left-wing majority, recently opposed government plans to double the 3.5% tax levied on complementary health insurance contracts.

In committee, the Senate adopted by 180 votes to 164 two amendments calling for an end to plans to increase from 3.5% to 7% the tax on “responsible, solidarity” contracts, including mutual and insurance contracts.

Provided for in the country’s 2011 supplementary finance law, and expected to yield around EUR1.1bn (USD1.49bn) for the state, the measure, announced by French Prime Minister François Fillon back in August, provoked outrage from the opposition from the outset.

Denouncing the tax as both unjust and intolerable, the French mutual insurance company Mutualité Française warned that the proposed increase would merely serve to exacerbate social inequalities, as it would lead companies to increase complementary contributions.

Urging individuals and unions to sign a petition, the company underscored the need to defend equality of access to health care in France, particularly given that the country is currently in deep social crisis.

To compensate for the EUR1.1bn shortfall in revenues arising from their decision, senators put forward the idea of raising the social levy by around 3% and increasing the social levy on income from capital by 0.5%.

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