Gabriel Attal Calls for Permanent Abandonment of VAT Threshold Reduction for Micro-Entrepreneurs
Paris, France – Gabriel Attal, former Prime Minister and President of the ruling Renaissance party, has urged the government to definitively abandon its plan to lower the VAT exemption threshold for micro-entrepreneurs, a measure included in the 2025 budget.
In a strongly worded op-ed signed by 100 Macronist parliamentarians, including former ministers Olivia Grégoire and Guillaume Kasbarian, Attal warns that the measure would "massively destroy activity and wealth in our country."
According to Attal’s estimates, over 200,000 micro-entrepreneurs would be affected, nearly half of whom are under the age of 30. He argues that the impact would extend beyond increased tax burdens for individuals to stifle entrepreneurship, harm the economic fabric, and diminish purchasing power for the French population.
"The risk is not only that the French will pay more taxes: it is also that they will create fewer businesses," Attal writes. "It is a risk for our entrepreneurs, a risk for our economic fabric, a risk for the purchasing power of the French."
The controversial budget provision aimed to reduce the revenue threshold below which micro-enterprises are exempt from Value Added Tax (VAT) from its current levels of €37,500 for services and €85,000 for commercial activities to a uniform €25,000, effective March 1st.
The proposal has drawn widespread criticism from professional organizations, particularly those representing micro-entrepreneurs, as well as from political parties across the spectrum, from La France Insoumise to the National Rally, including some within Macron’s own ranks.
In response to the backlash, Economy Minister Éric Lombard announced in early February that the measure would be suspended "for the duration of a consultation" that is scheduled to conclude by the end of the month.
"The reduction of public deficits will come from structural reforms of the State and public authorities, which must be exemplary and frugal," the signatories of the op-ed emphasize. "Not by taxing businesses and workers more."
Attal’s stance reflects growing unease within the ruling coalition over the perceived regressiveness of the VAT threshold reduction. Critics argue that it unfairly targets struggling entrepreneurs and freelancers, who often rely on small margins to sustain their businesses.
Furthermore, they contend that the measure would disproportionately impact young entrepreneurs, who are more likely to operate as micro-enterprises. By reducing their incentive to start and grow businesses, the threshold reduction would stifle innovation and entrepreneurial dynamism.
The government’s decision to reconsider the provision is a sign that it is taking the concerns of micro-entrepreneurs and opposition parties seriously. It remains to be seen whether the suspension of the measure will ultimately lead to its permanent abandonment or to a compromise that addresses some of the criticisms raised.
