Unsatisfied Self-Employed Individuals, Irked by Delayed VAT Reform for Small Enterprises
Fighting the Financial Struggle: Small Business Owners Protest VAT Reform Delay
On a chilly Tuesday, May 6, a group of self-employed individuals, ranging from home hairdressers to wine merchants, gathered in front of the Ministry of Economy and Finance in Paris, their voices echoing the sentiment, "TVA: Workers Viciously Impoverished." This demonstration highlighted the resistance to a proposed change in the value-added tax (VAT) regime that could impact their livelihoods.
Meanwhile, just a stone's throw away, junior minister Veronique Louwagie was conferring with a dozen parliamentarians, excluding representatives from the National Rally, to announce her plans to re-examine the VAT reform for small businesses. Previously suspended on two occasions, this latest review has now been postponed until the examination of the 2025 budget, likely in the fall.
The reform aimed to adjust the VAT threshold for micro-enterprises, reducing it from its current €37,500 for services and €85,000 for commercial activities to a uniform €25,000[1]. Had it been implemented, this change would have affected approximately 10% of businesses eligible for VAT exemption, translating to over 200,000 small businesses and freelancers[1]. The administration estimated an annual gain of €400 million for the state as a result[1].
However, the proposed reform has been met with adversity from small business owners and professional federations, leading to its delayed implementation[2]. Concerns have been raised that the VAT changes could impose extra costs on small businesses, potentially undermining their profitability and deterring entrepreneurship[2]. In response, former Prime Minister Gabriel Attal has expressed support for abandoning the VAT reforms entirely, citing potential disruptions to business growth and wealth creation[2].
The temporary delay until June 1, 2025, offers a chance for further consultation and debate[4]. As the budget debate for 2026 approaches, it remains to be seen whether the VAT reform will be revisited or discarded entirely.
- The gathering of small business owners in Paris on May 6 aimed to express their opposition to the proposed adjustment of the VAT threshold, a change that could affect their businesses.
- Parliamentarians, excluding those from the National Rally, are currently conferring with junior minister Veronique Louwagie, discussing the re-examination of the VAT reform for small businesses, which has been postponed until the examination of the 2025 budget later in the fall.
- The VAT reform, if implemented, could decrease the VAT threshold from €37,500 for services and €85,000 for commercial activities to a uniform €25,000, affecting approximately 10% of businesses eligible for VAT exemption, translating to over 200,000 small businesses and freelancers.
- The proposed VAT reform has been met with strong opposition from small business owners and professional federations, expressing concerns about potential extra costs that could undermine their profitability and deter entrepreneurship.
- The temporary delay for the VAT reform until June 1, 2025, offers an opportunity for further consultation, debate, and potential changes in politics and finance regarding the future of small businesses in the general news.
