The government recently announced a 4.8 per cent increase in the brackets of the progressive income tax scale, a rate corresponding to the forecast inflation rate for 2023. This announcement, which has received widespread coverage in the press, is sometimes presented as a proactive measure designed to cushion the impact of inflation on households in terms of the amount of income tax they are required to pay.
Index-linking to the projected inflation rate is in fact a standard practice, enshrined in Article 2 of most Finance Acts, the aim being to have a tax scale with brackets whose order of magnitude remains consistent with that of incomes.
