Income tax will not increase on January 1: what to expect for the year 2025 in the absence of a government budget ?

The increase in income tax may, however, occur at a later date. MAXPPP – Mourad ALLILI

The French will not pay more income tax on January 1, 2025 despite the absence of inflation indexation of the income tax scale, but the situation could change if France remains without a budget during the year.

As a result of the censure of Michel Barnier's government on December 4, France is without a budget for 2025.

On January 1, there will only be a “special law” authorizing the government to raise taxes and spend credits on the basis of the 2024 budget, without the possibility of new measures.

A rise that is not excluded for the spring

This “special law” does not allow for the traditional indexation of the scale of this tax on inflation. As a result, without a new budget, 380,000 new households are at risk of being subject to income tax, and millions of taxpayers are at risk of paying more.

On January 1, this lack of a budget for 2025 will not have an immediate impact on the French, who will not be taxed more, the Ministry of Public Accounts told AFP. The increase in income tax could, however, be seen later, when tax returns are filed in the spring, if no budget is adopted by then.

“The French who do not pay income tax today will not pay it tomorrow”

In an interview with La Tribune Dimanche, the new Minister of the Economy, Eric Lombard, sought to be reassuring, stating that “we will have a budget that will include an indexation of the scale”. “The French who do not pay income tax today will not pay it tomorrow”, he also assured.

Prime Minister François Bayrou had said on December 19 that he hoped to adopt a budget “in mid-February” without however being “sure of achieving it”. He had indicated that he would start again from “the copy that was voted on” in Parliament before his predecessor's censure.

In his draft budget for 2025, the previous government planned to increase the income tax brackets by 2% in 2025 in order to “protect the purchasing power of the French” by avoiding an increase in taxation linked to inflation. The shortfall was estimated at 3.7 billion euros for the State.