Institute for Research in Economic and Fiscal issues

IREF Europe - Institute for Research in Economic and Fiscal issues

Fiscal competition
and economic freedom

The Recentralization of the French Local Finance System

Abstract: The main characteristic of the French local tax system undoubtedly resides in a convoluted structure which impedes any progress in the development of tax competition between local authorities. On the contrary, recent legislative evolutions make obvious a trend of recentralization of the French local finance system illustrated by the fact the State is presently the first tax contributor to the local authorities’ budgets.

As a result, it becomes blatant that any new competence transfer to the local authorities without setting up an explicit financing scheme for these transfers will put an end to the local authorities’ autonomy.

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