PARIS (MNI) – The French government is considering reducing
employer payroll charges by E20 billion through tax credits accorded to
companies in exchange for a commitment to preserve employment, the
French weekly Le Point reports on its website.
The size of the reduction in employer payroll charges under
consideration is comparable to that proposed by industry executive Louis
Gallois as part of a package of measures to bolster the competitiveness
of domestic producers. Prime Minister Jean-Marc Ayrault is to unveil the
government’s strategy later Tuesday.
Rather than providing an immediate reduction in payroll taxes, the
measure would allow firms that accept the conditions to reduce their
taxes by an amount equivalent to around 6% of social payroll charges on
salaries up to 2.5 times the minimum wage, Le Point reports.
To finance the tax revenue shortfall, public spending by the
central government and municipalities would be cut by a total of E10
billion. The standard value-added tax rate would be hiked by 0.4 point
to 20%, and the intermediate rate for restaurants would rise from 7% to
10%.
To soften the blow for lower-income households, the minimum VAT
rate on food and other necessities would be trimmed by half a point to
5%. An ecology tax would also be introduced gradually to reach the
targeted amount, Le Point said.
Other measures among Gallois’ 22 proposals would be adopted,
including cash advances for small firms, cutbacks in red tape, an
expansion of broad-band access and no changes to tax measures over five
years. However, there is as yet no plan to lift the ban on prospecting
for shale gas, Le Point said, noting that the prime minister’s office
had confirmed that information.
–Paris newsroom +331 4271 5540; e-mail: ssandelius@mni-news.com
[TOPICS: M$F$$$,M$X$$$,MGX$$$]
