Social contributions[edit]
In recent years, the share of resources financing social protection has been changing. Traditionally, French social protection was financed by contributions rather than by taxes. Over the last three decades, there has been a reduction in the proportion of contributions (although still the primary source of funding) and an increase in funding from broader fiscal measures. In particular, revenue from the General Social Contribution (CSG), created in 1991, has increased considerably to become the second most important fiscal stream in France (after VAT). This development has arisen from the need to finance social protection not only with deductions from earnings, but also from a broader base. It also helps distinguish the financing of benefits corresponding to national solidarity from those covered by insurance. France has thus come closer to the average European Union member's social protection financing structure, although it remains among the countries having the highest percentage of direct contributions relative to earnings.