The effectiveness of the tax credit is once again highly contested

The effectiveness of the tax credit is once again highly contested
The effectiveness of the tax credit is once again highly contested

A year ago almost to the day, the boss of Sanofi, the Briton Paul Hudson, triggered an outcry saying that if his laboratory found a vaccine against Covid-19, the United States would be a priority to benefit from it, because they had invested more in research. A snub for Emmanuel Macron, while the French pharmaceutical giant is one of the main beneficiaries of the research tax credit (CIR), which the government, like its predecessors, has made one of the pillars of its policy of attractiveness industrial. Since then, the French champion has been left behind by his competitors to release a vaccine and continues his restructuring plans. “How can this company benefit from public aid and in particular the research tax credit (110 to 130 million euros per year for ten years)”, deplored the CGT in mid-March in a letter sent to the head of state.

A report, published Tuesday 1is June, comes to bring water to the mill of the contemptors of the CIR, which is also the first tax niche in amount (6.6 billion euros of expenditure estimated in 2020) since the disappearance of the tax credit for competitiveness and employment. The work of the National Commission for the Evaluation of Innovation Policies (Cnepi), a body headed by France Strategy, the evaluation and prospective body attached to Matignon, is critical of the effectiveness of this system, which ” it involves encouraging investment in innovation or the relocation of activities in France.

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On the one hand, the CIR, which consists of a tax credit of 30% up to 100 million euros of expenditure (and 5% beyond), presents “Positive and statistically significant effects on R&D activities [recherche et développement] and turnover [des entreprises bénéficiaires], but not on added value and investment ”, explains introductory note by Gilles de Margerie, commissioner general of France Stratégie. “This system benefits first of all companies that have already decided to innovate but have financing or liquidity problems. There is no evidence to suggest that it is well suited for developing innovation ”, underlines Antoine Bozio, director of the Institute of Public Policy (IPP) and co-author of one of the two studies on which the report is based. “The CIR is therefore more like a substitute for lowering corporate tax”, estimated between five and fifteen points post-CIR, highlighted the Economist.

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