La finance committee of the National Assembly deleted, on Tuesday, October 21, article 7 of the draft finance bill for 2026This text provided a “cut” of several hundred million euros on the tax aid scheme for productive investment overseas, arousing the unanimous anger of overseas deputies.
The government hoped to reduce the cost of the tax exemption, after a report of the General Inspectorate of Finance pointing to the continued rise in these expenses. But faced with the outcry from elected officials of all sides, the commission preferred delete the article altogether"We need reform, not blind re-planing," pleaded Guadeloupean MP Christian Baptiste, special rapporteur for overseas territories, who hailed a "first victory" in a budgetary marathon that had barely begun.
The 2026 budget project, in its initial version, nevertheless provides for severe restrictions. credits allocated to overseas territories would drop from nearly 3 billion euros to 2,8 billion, or 160 million less than in 2025. commitment authorizations would fall by 628 million, after several years of increases due to inflation. Above all, 750 million euros of savings would be expected on the support systems for overseas businesses, including 350 million on social security contribution exemptions (LODEOM) and 400 million on tax relief.
For elected officials, these cuts would directly undermine employment and already precarious local economies. Small businesses, artisans, farmers and communities would find themselves deprived of a essential lever for their survivalIn areas hit by the cost of living, unemployment or natural disasters, the risk of “real social breakdown” is considered major.
The removal of Article 7 will, however, have to be confirmed in a public session on November 9, where the government could attempt to reinstate the measure.The overseas deputies intend to defend a complete rewriting of the budget, believing that “the government is widening the gap instead of closing it”.
Source: Faxinfo https://faxinfo.fr/en/politique-les-deputes-suppriment-le-coup-de-rabot-sur-la-defiscalisation-outre-mer/
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