emirates7 - The French government is considering scrapping a longstanding 10 percent tax break granted to pensioners on their annual income declarations, as part of a broader plan to cut €40 billion from the national budget by 2026.
Public Accounts Minister Amélie de Montchalin did not dismiss the possibility in comments published today in Paris, saying, “Age should not determine how much tax one pays.” The potential measure is one of several under discussion to curb the country’s budget deficit, which rose to 5.8 percent of GDP in 2024.
De Montchalin emphasized that “all pension-related topics, including retirees’ tax advantages, are on the table in talks with social partners.”
The pensioner tax deduction, introduced in 1978, was originally designed to align retirees’ tax treatment with that of workers, who receive a similar deduction to offset professional expenses. However, critics now argue that the rationale behind the benefit no longer holds up given the government’s fiscal challenges.
Gilbert Cette, head of the French Pensions Advisory Council, backed the idea of eliminating the tax break earlier this year—a sentiment echoed by Medef President Patrick Martin. Martin called the application of a “professional expenses” deduction to retirees “illogical” and “absurd,” pointing out that the measure costs the state around €4.5 billion annually.
On the other hand, pensioners' unions have strongly criticized the proposal. In a March statement, they rejected the comparison between retirees’ tax benefits and workers’ expense deductions, warning that ending the break would raise taxes for approximately 8.4 million retirees—nearly half of all pensioners in France. The unions also stressed that many of those affected are not financially privileged.
Public Accounts Minister Amélie de Montchalin did not dismiss the possibility in comments published today in Paris, saying, “Age should not determine how much tax one pays.” The potential measure is one of several under discussion to curb the country’s budget deficit, which rose to 5.8 percent of GDP in 2024.
De Montchalin emphasized that “all pension-related topics, including retirees’ tax advantages, are on the table in talks with social partners.”
The pensioner tax deduction, introduced in 1978, was originally designed to align retirees’ tax treatment with that of workers, who receive a similar deduction to offset professional expenses. However, critics now argue that the rationale behind the benefit no longer holds up given the government’s fiscal challenges.
Gilbert Cette, head of the French Pensions Advisory Council, backed the idea of eliminating the tax break earlier this year—a sentiment echoed by Medef President Patrick Martin. Martin called the application of a “professional expenses” deduction to retirees “illogical” and “absurd,” pointing out that the measure costs the state around €4.5 billion annually.
On the other hand, pensioners' unions have strongly criticized the proposal. In a March statement, they rejected the comparison between retirees’ tax benefits and workers’ expense deductions, warning that ending the break would raise taxes for approximately 8.4 million retirees—nearly half of all pensioners in France. The unions also stressed that many of those affected are not financially privileged.