France to Raise Taxes On High Incomes

August 27, 2012 Taxation in France

Jean-Marc AyraultPARIS – The government of France intends to revamp the national tax system to increase taxation on the richest taxpayers and to provide greater economic support to small business.

In an interview with the French newspaper Le Journal du Dimanche on August 25th the Prime Minister of France Jean-Marc Ayrault indicated that the country would soon see a major overhaul of the national tax system, with a greater emphasis on taxing high income earners and on encouraging economic growth in France.

The Prime Minister said that the government  intends to reform the current tax system within the next three months and introduce measures to encourage greater investment into the economy, especially into small and medium sized businesses and companies involved in producing advanced or innovative products.

Jean-Marc Ayrault also stated that the government will introduce a 75 percent tax on incomes exceeding EUR 1 million per year. He explained that the new tax would be “progressive” and would place a financial burden on taxpayers “who until now have been favoured by the right.”

As part of the upcoming tax changes, the Minister confirmed that the government still plans to reduce the taxes applied to the purchase of petrol and diesel, a move which is expected to boost consumer spending and increase economic activity in France.

Speaking about the future economic growth of France the Prime Minister conceded that the current growth target of 1.2 percent is considered to be too high by some economic analysts, but affirmed that the goal is “reasonable, realistic and credible.”

Photo by jmayrault