October 7, 2022

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“Tax-free schedule”: What is this €1.2 billion measure, one of the ways out of the crisis?

David Clarinvale, Deputy Prime Minister MR and Minister for the Middle Classes, spoke on RTL News this Thursday morning about the energy crisis, for which it is difficult to see the beginning of a solution. “Putin’s statements on Wednesday are unlikely to reassure us, although the war in Ukraine is the main cause of the crisis. So it is feared that energy prices will remain high for some time.“, he explained to Fabrice Crossfili.

The economic statistics are alarming: energy prices are high, interest rates are rising, inflation is rising, and we’re on the brink of recession. We can understand that citizens are worried. And 40% of agri-food companies are struggling after the Covid crisis and the energy crisis, despite their previously healthy finances. There is a significant deterioration in the economic condition“, he continues.

Employers do not pay the full schedule

At the level of planned solutions, he noted “A tax exemption schedule”. “So citizens can get their 10% increase (in salary), but the employer will only pay net, not gross. So he will not pay the employer’s social security contributions. This would allow it to offer wage increases, thus guaranteeing the purchasing power of its workers, but without paying the full amount of this index. Hence, it restores competitiveness against their competitor. It will cost 1.2 billion euros, but it will bring savings in terms of the wages of its workers.

But with social security coffers running low, MR will have to convince other political parties in power, especially the Socialist Party.

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