PARIS: The French government plans to increase advances big companies have to pay on their 2017 taxes, two newspapers reported on Friday, in a move the main employers association has criticised. The extra cash would help keep the government’s deficit reduction plans on track as it cuts household taxes and increases spending on items like security heading into a presidential election next April.
President Francois Hollande’s government plans to cut the public deficit to 2.7 percent of economic output next year from an estimated 3.3 percent while not increasing the overall tax burden. It will publish its 2017 budget at the end of the month. Les Echos newspaper said the new tax advance on companies with revenues of more than 250 million euros should allow the state to book 400 million euros in 2017 instead of 2018.
A further 400 million euros could be reaped by broadening a tax advance paid by banks on some savings accounts, the paper and another daily, L’Opinion, reported. The Budget Ministry declined to comment.
“To finance electoral gestures and bring the deficit to 2.7 percent next year, the government is using budgetary tricks that harm the country’s attractiveness,” the Medef employers association said in a statement. Any sign of slippage on France’s deficit targets is likely to trigger criticism from the European Commission and France’s independent fiscal watchdog, which could prove embarrassing to the Socialist-led government heading towards the presidential vote.
