French PM plans to cut tax breaks

3rd June 2010, Comments 0 comments

The French government plans to cut certain tax breaks in an effort to boost its revenues, Prime Minister Francois Fillon said in a newspaper interview published on Thursday.

"Certain tax breaks will be removed on a case by case basis and other allowances will be stripped down by 10 percent," he told regional paper L'Est Republicain.

The cuts would be done "with exceptions, because we must not increase the cost of work", he said, apparently referring to certain income tax allowances.

He said he had set a compulsory target to boost tax revenues by five billion euros over two years as part of broad efforts to bring down France's public deficit.

Following stimulus measures taken to deal with the economic crisis, France's deficit is forecast to equal eight percent of output this year and Fillon said he aims to cut it by 2013, to below the limit of three percent set by EU rules.

There are some 500 categories of tax break from which various French taxpayers can benefit, which are estimated to cost the state 75 billion euros (92 billion dollars) a year.

The government has refused to describe its budgetary measures, which include Fillon's decision last month to freeze the value of public spending for three years, as an austerity programme.

"I have always called a spade a spade," he said in Thursday's interview.

"When states elsewhere in Europe lower public workers' pay or raise taxes, that is austerity. For the time being in France, given the economic outlook and the measures taken, we can avoid taking measures of that kind."

© 2010 AFP

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