France: Hollande outlines new taxes for recovery

10 Sep 2012, 11:09 am   -   Source: AAP
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Hollande said 10 billion dollars would come from additional taxes on households 'especially the well-heeled', 10 billion more from businesses and 10 billion from savings in government spending. (Getty)

Hollande said 10 billion dollars would come from additional taxes on households 'especially the well-heeled', 10 billion more from businesses and 10 billion from savings in government spending. (Getty)

French President Francois Hollande has has announced new taxes and savings measures worth 30 billion euros to balance the budget.

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France's Socialist President Francois Hollande has pledged 30 billion euros ($A37 billion) in new taxes and savings to balance the budget and fund a turnaround in two years and rejected criticism of dragging his feet.

Hollande, whose popularity ratings have taken a dive less than four months after he took office amid mounting discontent over the flagging economy and job cuts, also said a 75 per cent wealth tax on incomes over one million euros would not be diluted.

"The course is the recovery of France," he said in a television interview on Sunday.

"I have to set the course and the rhythm" to combat "high joblessness, falling competitiveness and serious deficits", he said. "My mission is a recovery plan and the timeframe is two years."

"The government has not lost time," he added. "It has reacted swiftly."

Hollande - who has famously said he does not "like the rich" - said 10 billion dollars would come from additional taxes on households "especially the well-heeled", 10 billion more from businesses and 10 billion from savings in government spending.

It would be the biggest hike in three decades.

"We will not spend one euro more in 2013 than what we did in 2012," he said.

He also vowed to curb unemployment, currently pegged at over three million, in a year's time.

Hit by the eurozone debt crisis, France's economy just avoided entering a recession in the second quarter.

Amid a decline in his popularity, Hollande has had the onerous task of preparing a 2013 budget that must save more than 30 billion euros to meet European Union deficit reduction rules.

Hollande also took a swipe at France's richest man, LVMH boss Bernard Arnault, who has sought Belgian nationality but denied wanting to become a tax exile.

"He must weigh up what it means to seek another nationality because we are proud to be French," Hollande said, adding that there would be no exceptions in a 75 per cent tax on incomes above one million euros .

"One has to appeal to patriotism during this period," he said.

Arnault said on Sunday he was not becoming a tax exile, despite seeking Belgian nationality.

"I am and will remain a tax resident in France and in this regard I will, like all French people, fulfil my fiscal obligations," the world's fourth-richest man told AFP.

"Our country must count on everyone to do their bit to face a deep economic crisis amid strict budgetary constraints," Arnault said, adding that the bid for dual nationality was "linked to personal reasons" and began several months ago.

An informed source told AFP that Arnault's move, news of which was broken by Belgian newspaper La Libre Belgique, was linked to a "sensitive" investment project that could be eased if he acquired Belgian nationality.

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Your Comments

Smart move for any French HNW individual

DavidSLesperance - from Toronto Canada, 8 months ago

Bernard Arnault is packing a fiscal parachute. If he decides to leap out of the French plane, with a Belgian passport, he will have all the necessary elements to properly leave the French tax system.If France decides to tax based on citizenship (like the US) then he has another passport in place so he will not be stateless. He can also give up his French passport, so that he will only have a Belgian one and thereby properly have left the French tax regime under the France-Belgian tax treaty.

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