Between 2017 and 2021, the share of households’ direct taxation in their income declined, falling from 21.4% to around 20%. On the one hand, a large number of tax cuts were implemented, and on the other, replacement incomes introduced during the health crisis were taxed at lower rates. As a catch-up effect, contributions and taxes on household income and wealth increased faster than household income in 2022.

The share of taxes and contributions in household income then fell again in 2023 and 2024. In particular, these two years were characterised by weak growth, or even declines, in income tax amounts (+0.9% in 2023 and -0.7% in 2024), while households’ nominal income rose significantly. The sluggishness of income tax in 2023 and 2024 is explained notably by the decline in real wages over the 2022-2023 period. Due to the deduction at source mechanism and the uprating of tax brackets in line with inflation, income tax dynamics are determined not only by the current payroll, but also by past trends in real wages.

Consequently, after two subdued years, income tax is expected to rebound sharply in 2025 (+8.4%), growing significantly faster than payroll. This rebound can be mainly attributed to the increase in real wages in 2024 (+0.8% in terms of average wage per capita, after -0.8% in 2023), but also to the strongly negative trend in real wages in 2022, which no longer influenced total tax levels in 2025, whereas it continued to depress receipts in 2024.

or 2026, excluding measures to be adopted in the financial legislation, the total amount of income tax should increase, boosted by the return of real wage growth over the years 2024-2025...