France’s finance minister says he will abandon new corporate levy

City A.M. Reporter
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CE will scrap plans for a new corporate tax which had been criticised by business leaders and instead temporarily increase existing taxes, finance minister Pierre Moscovici said in an interview with local media yesterday.

The government had announced in its 2014 budget bill last month a change in corporate tax policy by removing an annual flat tax that existed on top of other levies and introducing a new one based on operating profits.

That new tax on operating profits was meant to bring in €2.5bn.

The new tax “will not be”, Moscovici said in a joint interview with RTL, LCI and Le Figaro.

“What we suggest is ... a temporary increase in [existing] corporate tax.”

The government will launch consultations with business leaders and other stakeholders before finalising the new tax plans, he said. He did not say when he expected to hold those talks.

Moscovici reaffirmed President Francois Hollande’s target of cutting unemployment by year-end and reiterated his hope that the economy might do better than the government’s latest prediction of 0.1 per cent growth this year and 0.9 per cent growth in 2014.