French lawmakers back raising taxes on dividends from windfall profits

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Lawmakers in France’s National Assembly late on Wednesday voted in favor of an amendment which would raise taxes on large corporation’s dividends paid out on windfall profits.

In a blow to French President Emmanuel Macron’s government and its pro-business push, the amendment was voted through by lawmakers from the left, far-right, but also by some of Macron’s allies in the centrists, who originally proposed it.

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The government could still block the temporary tax increase with special constitutional powers to quash amendments before a final vote on the whole 2023 budget bill in both houses of Parliament.

After Macron’s government lost its governing majority in legislative elections in June, it is widely expected to resort to using those powers to pass the budget bill.

The new tax would raise to 35 percent from 30 percent a charge on dividends paid by large companies which made more than 750 million euros ($728 million) in turnover if the dividends are at least 20 percent higher than the average of what they have been paying in the 2017-2021 period, according to the amendment.

The amendment says that measures were needed in addition to a new clawback mechanism on power companies’ revenues that was agreed at the EU level at the end of September and is supported by the French government.

It says that energy and shipping companies as well as banks and insurers needed to be encouraged to make climate investments rather than “super-dividends” or “super share buybacks.”

Read more: French Nobel winner, others urge protests next week against Macron as inflation bites

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