The French parliament witnessed the forming of an unusual temporary alliance the other day. The MPs of left-wing La France Insoumise (LFI) and right-wing Rassemblement National (RN) voted together to introduce a €26 billion tax on multinationals.
The vote angered centre and centre-right MPs, who described the move as “dangerous” and “irresponsible,” proving that defending national sovereignty against foreign companies is still far from being a given.
The first part of the budget debate in the National Assembly was dominated by an agreement between the centre-right and the RN to counter the ‘tax hike’ demanded by the Left. But the balance of power shifted on the evening of Tuesday, October 28th, with the LFI and RN groups, joined by the Socialists, voting together on an amendment put forward by the chairman of the finance committee, LFI MP Éric Coquerel, aimed at taxing multinationals in proportion to their actual activity in France. The amendment seeks to combat the tax optimisation practices commonly used by large corporations, while filling the state’s coffers to the tune of €26 billion. At the same time, MPs also voted to double the tax on GAFAM, the five big tech giants.
The measure was adopted by 207 votes to 89. The entire centre bloc—Macron’s supporters and their allies from Les Républicains (LR)—voted against it, vigorously expressing their disapproval. Economy Minister Roland Lescure attacked Marine Le Pen, saying that with this vote, France was “giving the finger to 125 countries” and trampling on all international conventions. Renaissance MP Pierre Cazeneuve also attacked Marine Le Pen: “You have just voted for nonsense … go home, go back to the fair.”
In the LR party benches, there is alarm about the economic consequences. “The adoption of this amendment is a real scandal. Under the guise of tax justice, France is isolating itself and exposing itself to capital flight and the relocation of headquarters. By weakening our businesses, we are sacrificing our economic sovereignty. The repercussions will be terrible,” explains LR MP Valérie Bazin-Malgras.
The RN does not see it that way. The vote on the tax on multinationals is presented as an objective of tax justice and national sovereignty. “With the U.S. withdrawing from pillar 2 of the OECD agreement, the global minimum tax on multinationals is dead. We therefore need a mechanism to actively combat organised tax fraud via transfer pricing and other royalties. This is a measure that has been supported by sovereigntists for fifteen years,” RN MP Jean-Philippe Tanguy told Le Figaro. He added: “Basically, Starbucks will finally pay 25% corporation tax in France. I would like someone to explain to me why that is shocking.”
The Ministry of Economy brandished the classic argument that the measure is unfeasible, as France’s international commitments would take precedence over such an amendment.
On social media, a large section of the government’s right wing is having a field day discrediting the RN and explaining that it is a ‘left-wing’ party, with which any alliance is forever impossible. However, the measure approved by the RN is a fairly classic economic sovereignty move. In Hungary, Viktor Orbán passed a similar measure in 2022 so that the tax burden would not fall exclusively on Hungarian companies.
In any case, the amendment must also be examined by the Senate, where it is likely to be rejected. It will probably not be included in the final version of the budget, the date of submission of which is still unknown.
