Important Changes in 2019 That Will Impact Life In France

Important Changes in 2019 That Will Impact Life In France

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change in France 2019
© Dorian Hurst/Unsplash

The year 2018 witnessed the exigency for change in France. Change in the way we pay our taxes and in how much we earn, increase our spending power or contribute to the community chest. Change expressed in anger on the streets, initiated in new laws and reflected in an appeal from the French president to organize a national debate in January 2019 on four major themes:

  • Environmental transition
  • Tax system
  • Democracy and citizenship
  • Organization of the state and public services

If the demand for change feels tumultuous, it’s important to understand why the French steadfastly support a “Yellow Vest” movement that has manifested in protests throughout the country every weekend since November 2018. It’s widely known that France is the most-taxed country in Europe.

A poll published in December 2018 by Elabe for BFMTV revealed 70 percent of the French showed sympathy and support for the protestors who oppose rising taxes. Sustained popularity for the Yellow Vests plunged President Macron’s ratings to 29% by the end of the year. In January, support for the movement dipped but still more than half the French population want the Yellow Vest protests to continue.

comfort in food
Yellow Vest protesters storm the Arc de Triomphe in Paris, France on Dec. 16, 2018. © Christopher Dickey

Fuel tax ignites anger

The initial Yellow Vest Protests were triggered by an announced hydrocarbon tax as part of President Macron’s campaign promise to “Make the Planet Clean Again.” The hike, originally to start on January 1, was to add 6.5 cents per liter on diesel and 2.9 cents on gasoline in order to help curb emissions and fund initiatives for cleaner cars and home-heating systems.

But low-income earners felt the new tax was one too many tax injustices for them.

“How do you plan for the future when you don’t have enough to feed your family at the end of the month?” – Yellow Vest Protester, Act 2, November 24, 2018

An online petition spread into a grassroots movement organized through social media. They named themselves the “gilets jaunes,” for the fluorescent yellow safety vests that French motorists are required to have in their cars in case of an emergency. Heeding the calls for action online, thousands of protesters clad in reflective yellow vests marched on streets, barricaded roads and even tried to storm the Arc de Triomphe in their third act of protests.

While most French people do not support the violence that has punctuated weekend demonstrations on Saturdays, taxpayers from all social backgrounds are now asking the same questions.

If the French are paying the highest taxes and social charges in Europe, how is the French government spending the revenue?

With free health care and education, which government services should be abandoned to alleviate the government debt? Which reforms are priorities and which changes will the French people accept? President Macron and his government were forced to make some key concessions to quell the growing uprising. He is now banking on a national debate to put the cards on the table for discussion. The success, of course, will depend on public participation, civil exchange and public education.

To learn more and participate, visit the site of the National Commission for the Public Debate.

© Titouan/Unsplash

New French Laws for 2019

There is no overnight panacea to resolve the economic malaise à la française. But “change” is the mantra for 2019. Here are some new laws that could affect your pocketbook and French lifestyle in this new year:

Minimum wage to increase

If you have been earning the minimum wage of €9.88 working in France, you will see an increase of 1.5% or €100 a month from January 1st. France’s minimum wage or SMIC, as it’s called in French, will increase to €10.03 euros

This translates into €1,521.22 per month if you are performing the legal workweek of 35 hours.

Overtime and bonuses

Salary workers will get a break on taxes for work carried out in overtime. The move was to begin in September of 2019 but has been moved up to January 1st.

Also, employers will be encouraged to offer bonuses to some employees to reward performance.

© Aumar/123RF

Breaks on CSG “Social Charges” for retirees

All workers in France pay CGS or “social charges”. Some even call the CGS a euphemism for a tax. However, it is social charges in France that provide universal health care, free education, daycare and child benefits. CSG is calculated on your earnings and type of declared work status.

Most of us will continue to pay the CSG but some retirees will get a break in the New Year. The government announced in December that, starting in 2019, pensioners receiving less than €2,000 per month will be exempt from the rise in the cost of the CSG “social charges” imposed in 2018.

The concession resulted from demands made by vocal senior “Yellow Vests” and means that retirees that fall into the right pay bracket will pay the previous rate of 6.6% compared to the 8.3% which they paid after the increase.

The exemption doesn’t come into effect officially until the second half of the year, but pensioners affected will receive a back payment to cover the first six months of the year.

financial risk
© Andrly Popov/123RF

Pensions and solidarity allowances to rise

Still, retirees take note. Pensions will rise slightly by just 0.3% from January, well below inflation, which sits at around 1.8%.

To offset, the government has increased the solidarity allowance for an elderly person by €35 per month, bringing it up to €868, and increased the allowance by €54 per couple to obtain €1,348.

PAYE: Pay monthly taxes as you earn

Instead of paying French taxes in a lump sum calculated on last year’s income, France begins calculating and deducting your tax payments from the source of your income every month. The new system is called PAYE, and to help taxpayers adjust to the change, the French government is offering flexibility in monthly payments.

Taxe d’habitation to be phased out

Relief for many homeowners continue. The government’s plan to phase out the residence tax called the taxe d’habitation helped many households in France in 2018.

The assistance will continue in 2019 with a further 30% drop before it is completely eliminated in 2020. To find out if you are eligible for the reduction based on your income, click here to calculate.

© CCO Creative Commons

New rules for Airbnb and property rentals

Do you own a property that you rent out? The use of prepaid cards is now forbidden in France. Visitors can no longer pay with a prepaid card on furnished rental platforms such as Airbnb. And property owners must declare all revenue earned as of January 2019 on rental platforms in their income tax filings the next year.

An occupancy or visitor tax must now be collected on rental platforms such as Airbnb, HomeAway-Abritel, LeBonCoin, Tripadvisor, and others.

Gas and electricity prices 

Gas prices dip on average by 1.9 percent on January 1st. The drop will be 0.6% for those who cook with gas, 1.2% for those who use gas for cooking and heating water, and 2% for homes which are also heated by gas.

Electricity will see a 2.3% hike.

teen smoking
© Concept Photo/Shutterstock

Stamp and cigarette prices to rise

From January 1st the price of stamps is set to rise by about 10%.

And smokers can expect their habit to cost slightly more with cigarette prices going up 50 centimes with each new hike. To reduce smoking in France, the French government plans to gradually augment the price of cigarettes; so by 2020 a package of “clubs” will cost €10.

Uninsured drivers face high fines

If driving in France already doesn’t drive you crazy, don’t dare hit the roads uninsured. Motorists without driving insurance face fines of up to €3,750 and you risk being slapped with additional penalties such as the suspension or cancellation of a license and even the confiscation of the vehicle.

From January 1st, French police will be on the lookout for more than speeding cars.

Source: flickr

What else could change in 2019? Even daylight savings time in France could be abandoned this year. The EU agreed in 2018 to allow countries to decide whether it would end the ritual of switching summer to wintertime. Could more sunshine make changes in our lives easier to accept in 2019?

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