Hollande plans u-turn over key business levies

Elizabeth Fournier
FRENCH president Francois Hollande is set to tell entrepreneurs today that he will slash their capital gains tax, less than a year after abandoning plans to increase the duty following a huge business backlash.

An official in Hollande’s office told French media that the under-pressure President will use a meeting with business leaders today to announce plans to reduce the taxable amount of their capital gains by up to 65 per cent.

Under special cases such as a business owner retiring, the deduction could reach as much as 85 per cent.

Hollande announced plans early in his leadership to hike capital gains tax that business leaders have to pay, but was forced to backtrack last October after high-profile warnings that the move could drive firms away from France.

His 2013 budget unveiled last year spelled out more than €20bn of tax hikes, including the 75 per cent levy on incomes above €1m a year that saw actor Gerard Depardieu seek Russian citizenship, and businessman Bernard Arnault threaten to leave the country.

Speaking ahead of today’s meeting, the presidency official did not confirm the numbers but insisted that Hollande wanted to encourage businesses to be set up and help risk-taking investors that finance new firms.

Just under a year into his presidency, Hollande’s Socialist government is struggling to win back corporate France’s confidence, with many business people fearing more tax hikes are in store as the state battles to bring down its budget deficit.