Facing a large hole in its coffers, the French government has targeted cash-rich shipowners in its latest budget plans.
Operating income of shipping companies that elect to use the country’s tonnage tax system and whose annual turnover is EUR500m ($546m) or more per year will be hit a 9% tax next year followed by a 5.5% tax the following year.
Ramon Fernandez, the chief financial officer of CMA CGM, France’s top containerline, said the temporary tax would set his company back by around EUR800m over two years. The levy represented a “competitive disadvantage” for CMA CGM, Fernandez argued.
French shipowners have been forced to defend the country’s tonnage tax system repeatedly in recent months with it becoming a talking point at this year’s parliamentary elections. The tax system has been in place since 2003.
France’s newly-installed government’s first budget contains EUR60bn in total tax hikes and spending cuts in a bid to cut its 6.1% deficit to 5% of gross domestic product by next year.
Parliamentary discussions on next year’s budget will start next week and are expected to be finalised by the end of the year with a vote and enactment.