French Government Maintains Childcare Tax Benefits Amid Budget Cuts
Public Accounts Minister Amélie de Montchalin confirms no changes to childcare and elderly care tax advantages in the upcoming 2026 budget.
On June 10, 2025, Amélie de Montchalin, the Minister in Charge of Public Accounts, stated that the French government will not eliminate the tax advantage for childcare and the support of elderly individuals as it seeks to manage a budget shortfall of 40 billion euros for 2026. During an interview on RTL, de Montchalin emphasized the efficacy and importance of these benefits, declaring, "There are two subjects on which I believe collectively we see that it works and we should not touch: everything related to childcare and to the support of elderly people."
Currently, tax incentives exist for 26 different service professions, providing a tax credit equal to 50% of incurred expenses.
De Montchalin raised questions regarding the appropriateness of the current parameters, such as the reimbursement rate and its relationship with undeclared work, but firmly reiterated that the benefits related to childcare and elderly assistance would remain unchanged.
Furthermore, Prime Minister François Bayrou is expected to announce budgetary guidelines by July 14, intending to reduce the public deficit to 4.6% of GDP in the coming year, following anticipated deficits of 5.4% this year and 5.8% in 2024. The government favors cutting expenditures rather than raising taxes.
De Montchalin commented, "It is the last moment to have courage; we must get ourselves in order," and noted that France faces severe scrutiny regarding its public deficit performance compared to other Eurozone countries, with possible implications from international institutions like the IMF.
The Minister expressed the need for more efficiency within all ministries, specifically in areas such as Justice, Interior, and Defense, which are supported by multiannual programming laws.
Discussions on potentially reevaluating budgetary allocations will take place, particularly regarding the number of civil servants, as de Montchalin noted a significant reduction in personnel at the General Directorate of Public Finances over the last decade.
In parallel, the French Senate has passed a bill targeting fast fashion, specifically aiming at platforms like Shein, which have faced criticism for their environmental impact.
The legislation includes penalties for polluting companies and restrictions on advertising for fast fashion items.
This follows the Assembly's approval a year earlier, with the Senate now seeking a compromise with deputies through a mixed commission expected in the fall.
The Senate's bill is a response to public concerns regarding the environmental costs of rapid textile production and the overwhelming presence of low-cost clothing inundating the market.
The goal is to implement measures that protect both environmental and economic interests, with ongoing debates set to continue as stakeholders engage in discussions on the future of the sector and consumer responsibilities.
Currently, tax incentives exist for 26 different service professions, providing a tax credit equal to 50% of incurred expenses.
De Montchalin raised questions regarding the appropriateness of the current parameters, such as the reimbursement rate and its relationship with undeclared work, but firmly reiterated that the benefits related to childcare and elderly assistance would remain unchanged.
Furthermore, Prime Minister François Bayrou is expected to announce budgetary guidelines by July 14, intending to reduce the public deficit to 4.6% of GDP in the coming year, following anticipated deficits of 5.4% this year and 5.8% in 2024. The government favors cutting expenditures rather than raising taxes.
De Montchalin commented, "It is the last moment to have courage; we must get ourselves in order," and noted that France faces severe scrutiny regarding its public deficit performance compared to other Eurozone countries, with possible implications from international institutions like the IMF.
The Minister expressed the need for more efficiency within all ministries, specifically in areas such as Justice, Interior, and Defense, which are supported by multiannual programming laws.
Discussions on potentially reevaluating budgetary allocations will take place, particularly regarding the number of civil servants, as de Montchalin noted a significant reduction in personnel at the General Directorate of Public Finances over the last decade.
In parallel, the French Senate has passed a bill targeting fast fashion, specifically aiming at platforms like Shein, which have faced criticism for their environmental impact.
The legislation includes penalties for polluting companies and restrictions on advertising for fast fashion items.
This follows the Assembly's approval a year earlier, with the Senate now seeking a compromise with deputies through a mixed commission expected in the fall.
The Senate's bill is a response to public concerns regarding the environmental costs of rapid textile production and the overwhelming presence of low-cost clothing inundating the market.
The goal is to implement measures that protect both environmental and economic interests, with ongoing debates set to continue as stakeholders engage in discussions on the future of the sector and consumer responsibilities.
