The Council for Compulsory Deductions, attached to the Court of Auditors, recommends removing the tax reduction for tuition fees for pupils and students. Deemed ineffective and redundant, this tax advantage, little known despite its use by 4.5 million households, is seen as mainly benefiting the wealthiest families.
A costly and poorly targeted tax cut
The Council for Compulsory Deductions (CPO) has proposed abolishing the tax reduction for tuition fees, a little-publicized mechanism despite its use by 4.5 million households in France. This reduction, which allows 61 euros to be deducted from income tax for a child in middle school, 153 euros for a high school student and 183 euros for a student, represents a total cost of 433 million euros for the State in 2023. .
Although the amount involved is less compared to other tax measures, such as the tax credit for employing an employee at home (6.8 billion euros planned for 2025), the CPO brings into question questions its usefulness, as reported by La Tribune. This apparently simple tax reduction – you just need to indicate the number of children in school in your tax return – is considered “redundant” and “poorly targeted” compared to other public aid, such as the back-to-school allowance (ARS) or student grants. According to the Council, this measure is mainly aimed at wealthy and taxable households, while low-income families, often non-taxable, are excluded.
Another point raised by the report is the concentration of this tax advantage on the richest households. Indeed, according to CPO data, “households located in the 8th, 9th and 10th deciles of reference tax income (RFR) represent 66% of beneficiaries for middle school, 67% for high school and 75% for high school. “higher education”. This situation is partly due to the very nature of the tax reduction, which only benefits taxable tax households. On the other hand, the middle and lower classes, more likely to use ARS or scholarships, rarely access this tax advantage.
A necessary reform to better target aid?
The report also highlights the paradox of this measure, which requires no particular formality other than completing your tax return. However, many eligible households do not use it, a phenomenon called “non-take-up”. This observation adds to the criticism according to which the amount of the reduction, from 61 to 183 euros depending on the level of studies, remains relatively low compared to other aid such as the ARSwhich oscillates between 416 and 454 euros per year.
According to the Council, the tax reduction for tuition fees fails to fully play its role in supporting families, in particular because of its targeted nature on taxable households. It is considered “symbolic” and “not very effective” in relation to the needs of households. The CPO suggests that this measure, duplicated with the back-to-school allowance or scholarships, could be removed to redirect funds towards fairer and more efficient systems.
This proposal is part of a broader context of reflection on tax loopholes, while the government seeks to reduce public spending. Other measures, such as the 10% reduction on retirement pensions or the tax credit for home employment, are also targeted by reforms.
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