The Senate on Wednesday began reviewing a draft law to combat social and tax fraud that the government hopes could raise more than two billion euros, despite strong opposition from the left who denounced “persistence” towards beneficiaries.
New means of detecting fraud, strengthening sanctions and obligations, improving information sharing within the government… With this plan, the government intends to tackle a major project, which is more useful in the context of budget gaps.
The executive also wants to link the examination of this text with the examination of the budget, currently underway in the National Assembly, considering this “fraudulent plan” as an important complement to the State budget and Social Security.
On the social aspect alone, fraud in fact represents an annual shortfall of 13 billion euros, according to an assessment by the High Council for the Financing of Social Protection. However, only 2.9 billion euros can be recovered by 2024, with a very low effective recovery rate.
The bill aims to “accelerate the transition from suspicion to detection, from detection to sanction, and from sanction to recovery”, summarized Health Minister Stéphanie Rist at the opening of the debate.
The plan specifically is to facilitate the transfer of information within government, for example by expanding access to tax and social data to health insurance agents, old-age insurance and pension insurance funds.
Health carriers – ambulances and taxis – will also be required to equip themselves with geolocation devices to monitor the reality of their services, starting in 2027.
The bill also includes a section relating to hidden work, which includes increasing CSG rates for income from illicit activities, among other things.
On Wednesday evening, senators mostly discussed the tax portion of the bill, less obnoxious than the section dedicated to social fraud. In particular, they adopted an article requiring all “luxury goods” transactions over 10,000 euros to comply with certain precautionary obligations in the fight against money laundering.
€2.3 billion was expected, a projection that was “not credible”.
They also strengthened the sanctions applicable in the event of public financial fraud committed by organized gangs, increasing the penalty to 15 years in prison compared to 10 years in prison under the current law.
The Senate also voted to give the tax administration the possibility of controlling professional electronic payment terminals.
The government hopes to recover, thanks to the entire bill, 2.3 billion euros starting in 2026. That is, according to the senators, 1.5 billion euros for tax fraud and 800 million euros for social aspects. The results “do not appear to be credible”, according to the High Council for Public Finance (HCFP).
The measures proposed by the government are “relevant”, in the assessment of UDI Senator (centre) Olivier Henno, one of the rapporteurs on the text, but “the government was still very hesitant at first”, he said, and promised to “strengthen the text to detect better, recover more and impose more sanctions”.
Despite opposition from the left, the center-right alliance that dominates the Senate will seek, on Thursday, to strengthen the tools available to the adopted France Travail to verify recipients’ residency in France. Another proposed measure is the prudent suspension of social benefits if there are serious doubts about fraud.
“Fraud is fraud, whether committed by business managers, social security officers, the unemployed or RSA recipients. We broke the rules a little,” supported LR senator and co-reporter Frédérique Puissat.
Leftists, who are in the minority, have united in criticizing the bill because it focuses too much on social fraud among beneficiaries. “We target low-income people while we don’t target multinational companies,” complained communist Cécile Cukierman.
The socialist scholar Patrick Kanner estimates that this text states “that the poor will pose a threat to the nation’s main financial balance.”
The upper house will vote on the entire bill on Tuesday, before it is submitted to the National Assembly.
