Often, the work of the Court of Auditors gives administrations cold sweats. But they can also sometimes make them smile. This is the case of report published on Tuesday January 25 by the financial magistrates and which draws up a flattering assessment of the reform which has completely transformed the payment of income tax since 2019.
Strong adhesion
Long considered impossible, the reform had been prepared at the end of François Hollande’s five-year term. Postponed by a year, it finally took its mark from 2019. With success, both technically and in terms of its acceptance by households. “Income tax deduction at source has received strong support since its introduction”, notes the report.
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The magistrates welcome the way the reform has been prepared “diligently by the tax authorities”. The hiccups, once dreaded, have indeed been more than limited. However, all is obviously not perfect. The Court thus points to certain complex mechanisms, particularly in the consideration of tax credits and reductions.
A more responsive tax
Beyond the success of the switch from one system to the other, the Court analyzes the advantages brought by the deduction at source. The new tool “expands the possible functions of income tax”, note the magistrates. Indeed, the tax has become “more responsive to the situation”. A tax reduction (or an increase) now becomes immediately perceptible to the taxpayer.
This is what happened with the reduction in the rate of the first tranche. Voted by Parliament at the end of 2019, the measure could be applied from January 2020. Thus producing “an immediate effect on the purchasing power of the households concerned”.
“Successful reform” triumphs Bercy
The fact of levying a tax varying according to the income received each month, and no longer with a one-year lag as before, has thus proved to be invaluable during the health crisis. This made it possible to immediately “ smooth the effects of the loss of income suffered by taxpayers”, recalls the report.And this also led to “immediate application” various postponement or exemption measures granted by the government to cushion the shock of the crisis.
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This satisfaction was obviously appreciated at Bercy. The Minister of the Economy Bruno Le Maire and the Minister Delegate for Public Accounts immediately welcomed the fact that the Court of Auditors judges the withholding tax “as a necessary and successful reform”. Three years after its implementation, the reform is therefore indisputably ” a success “, they assure, recalling a survey carried out last year which showed that “82% of French people no longer wish to return to the previous system”.