France’s socialist government is to press ahead with plans to curb tax and other concessions for self-employed business people, despite a furious protest campaign.
The government softened some of the changes it originally proposed for the so-called “auto-entrepreneur” tax regime, but decided on Wednesday to introduce a two-year time limit and more restricted revenue caps for those taking advantage of it.
The move provoked a swift response from “Les Poussins” – The Chicks – a protest movement that has attracted more than 100,000 signatures for an online petition against the changes. The campaign echoes a successful tax rebellion last year led by internet entrepreneurs calling themselves “ Les Pigeons”.
“We cannot and we must not accept this denial of social democracy which will end in the destruction of our activities, our employment and the dynamism of entrepreneurial growth in France,” the group said on its website.
The auto-entrepreneur regime was introduced under former President Nicolas Sarkozy to enable individuals to start their own businesses via a simple online registration process. It simplified and reduced tax liability, allowing “auto-entrepreneurs” to avoid much of the normally heavy social charges levied on employment.
The regime now covers 900,000 people and accounts for almost half of all new businesses created in France, including many who in effect work as freelancers on low income levels.
But established businesses in areas such as the building trade, hairdressing and car repair have complained that it allowed unfair competition. Trade unions also said larger businesses were avoiding taking on workers on secure contracts, using auto-entrepreneurs instead.
The government has reacted by reducing the annual income ceiling for auto-entrepreneurs in the service sector to €19,000 from €33,000, and to €47,000 from €81,500 for commercial traders. Any auto-entrepreneur who exceeds these limits for two successive years will have to transition to regular company status.
The government wants to see the auto-entrepreneur regime used as a genuine springboard for new businesses, rather than a tax haven for the self-employed. Sylvia Pinel, the minister for artisans, traders and tourism, said: “The aim of the government is to make this regime the first step in the creation of businesses.”
The reduction of the revenue ceilings and the time limits are less strict than originally proposed. But critics said the changes risk forcing many auto entrepreneurs to unemployment or other benefits.
“It is better than what Pinel first had in mind, but it will destroy jobs and I’m not sure France needs to destroy jobs just now,” said Jean-David Chamboredon, one of the founders of Les Pigeons.
However, Capeb, the confederation of artisans and small businesses, reflected the reaction of more established businesses, saying the reform did not go far enough to harmonise the tax treatment of small companies.
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