French PM rules out raising VAT

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Prime Minister Francois Fillon ruled out raising the value added tax (VAT), saying France needs to focus instead on cutting spending, in a meeting on Tuesday with lawmakers, participants said.

Fillon told lawmakers from his UMP party that raising the VAT would open a tax gap with Germany.

The prime minister said that while France could try to make improvements on the revenue side, that its main problems were on the expenditure side, several lawmakers present at the meeting told AFP.

Fillon's aides confirmed his position.

The prime minister made his remarks following a newspaper interview given by Jean-Francois Cope in which the UMP party leader endorsed lowering taxes tied to employment in favour of increasing the VAT.

© 2011 AFP

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