Tag: Tax Fraud

Macron has given himself until Bastille Day on July 14 to mend his broken rapport with the French, aiming for a rebound after a gruelling pension battle that has roiled the nation and deepened a crisis in French democracy.

The “hundred days” kicked off with a flurry of ministerial announcements on Tuesday that left little doubt as to the direction France’s minority government plans to take as it seeks to regain the initiative and find new allies in parliament.

While tax fraud – traditionally a priority of the left – got a brief mention, ministers put the focus squarely on the issue of welfare fraud, long a favourite topic of the right. They promised greater checks on a back-to-work welfare benefit scheme known as the RSA, using language typically espoused by critics of “assistanat” – a derogatory term used to refer to “scroungers” living on state handouts.

Speaking on LCI television, Interior Minister Gérald Darmanin drew a line between RSA beneficiaries who “show an effort” and those who “should naturally be sanctioned”. His cabinet colleague Bruno Le Maire, the finance minister, took matters a step further, linking welfare fraud and immigration.

“The French are quite rightly fed up with this fraud. They’re sick and tired of seeing people eligible for benefits (…) sending the money to North Africa or elsewhere,” he said. “That’s not what our social model is for.”

The decision to single out immigrants for criticism was swiftly denounced by the left-wing opposition, which accused the government of once more pandering to the right and far right in a bid to divert attention from the battle over pensions.

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Tangiers-born Jean-Luc Mélenchon, the head of the hard-left France Unbowed (LFI), denounced a “new campaign” to target French nationals “who are Muslim or hail, like me, from the Maghreb”.

“Here’s a little dose of racism to start appeasing France,” tweeted the Greens’ Sandrine Rousseau, his partner in the left-wing Nupes coalition.

“The far right is dangerously filling up the government’s void,” added the Socialist leader Olivier Faure, who accused the government of peddling “racist prejudice to elude the fact that welfare fraud is mostly carried out by employers and bears no comparison with the scale of tax fraud”.

Echoes of Sarkozy

Statistics compiled by France’s top financial auditor, the Cour des comptes, show tax evasion in France eclipses social security fraud on a scale of up to 100 to 1.

“Welfare fraud amounts to between 1 and 3 billion euros per year, according to the Cour des comptes, whereas the cost of businesses cheating on social security contributions amounts to around 20 billion euros,” says Vincent Drezet, a spokesperson for the NGO Attac, best known for its calls for a Tobin Tax on financial transactions.

As for tax evasion, it amounts to a loss for the state’s coffers of “between 80 and 100 billion euros”, added Drezet, who previously headed France’s national union of revenue workers.

The scale of the problem is inversely proportional to the level of attention politicians dedicate to tax and welfare fraud respectively.

The emphasis on the latter “has been a constant theme for the past 25 years”, says Vincent Dubois, a professor of sociology at the University of Strasbourg and author of a book on state control of the “assistés” (those living on state handouts).

“While the unemployed have always been suspected of shirking efforts to find work, there was a marked shift in the 1990s when then Prime Minister Alain Juppé ordered the first parliamentary report into abuses by people benefiting from welfare programmes,” he said. “Welfare fraud has been a major topic ever since, particularly under Nicolas Sarkoy’s presidency, when ‘assistanat’ and ‘work ethic’ were constantly opposed.”

A similar rhetoric underpinned Macron’s past reforms that toughen the requirements to be eligible for unemployment benefits. During his re-election campaign, he pledged to make the RSA conditional on working 15 to 20 hours per week – a plan some unions have described as “forced labour”.

‘Foreign delinquency’

Meanwhile, treasury workers tasked with chasing after tax evaders have seen their resources dwindle, says Drezet, pointing to a 30% reduction in the number of tax controllers over the past decade.

“The state is increasingly underequipped to take on this task,” he lamented.

On Tuesday, the junior Budget Minister Gabriel Attal promised to unveil “strong measures” in the coming weeks to battle tax evasion, including doubling staff at a special unit that has recently carried out large-scale raids at banks suspected of tax fraud.

His announcement was largely eclipsed by Le Maire’s comments on immigrants abusing social security, which coincided with a promise by Darmanin to tackle “foreign delinquency” in a forthcoming immigration bill – a plan Macron revived on Monday after opting to put it on the back-burner at the height of the pension furore.

“There is clearly a renewed emphasis on welfare fraud, though this time it is explicitly associated with the subject of immigration,” said Dubois. “This summons a well-known fantasy: that behind the figure of the fraudster lies that of the immigrant who abuses the system.”

The strategy recalls the final stages of the “Grand National Debate” that Macron convened as an answer to the Yellow Vest crisis during his first term in office. Back then, the president proposed holding an annual debate in parliament on immigration as an answer to the “fiscal, territorial and social injustice” he said was voiced in the protests.

Commenting on the first steps of Macron’s latest action plan, former conservative leader Jean-François Copé spoke of a “belly dance” aimed at wooing lawmakers from the right-wing Les Républicains.

Day one of the plan was unlikely to appease the millions enraged by the government’s pension push. It may, however, have gone some way towards appeasing the handful of MPs it needs to cobble together a majority in parliament.

This article was translated from the original in French.