François Hollande proposes the return of “social VAT”

François Hollande, among others, is one of those putative or declared candidates in the 2027 presidential election to put the question of “social VAT” back on the table. In his new book, Unite. New world, new left, published this Thursday by Robert Laffont, the former President of the Republic (2012-2017) pleads in favor of this measure long supported by employers and hated by the unions. The socialist had however... repealed in 2012 the social VAT put in place by Nicolas Sarkozy. A decision he would later admit to regret. From now on, he recommends increasing the rate from 20% to 24%.

Which did not fail to provoke a reaction from Nicolas Sarkozy's former prime minister, François Fillon. “François Hollande is proposing the establishment of a social VAT that my government had adopted in 2012 and which he rushed to have repealed. It took him 14 years to convert!” he joked on X.

A measure mentioned in 2007

Social VAT, mentioned in 2007, is not a new tax. Implementing it involves increasing the standard VAT rate to finance a reduction in social security contributions. The additional VAT tax revenue would be allocated to Social Security. Its promoters believe that it would reduce labor costs for businesses. A way to increase the net salary of workers, and therefore their purchasing power.

Opponents denounce a measure that is not progressive. According to them, the poorest households would be more affected by the implementation of the system. The unions, for their part, denounce a risk of a “windfall effect” for companies at the expense of consumers.