PARIS (MNI) – To improve the competitiveness of the French economy,
the government should focus both on structural reforms and ways to
lighten the tax burden on producers, Finance Minister Pierre Moscovici
said Tuesday.
The question of labor costs is “not taboo”, the minister reiterated
in a radio interview, arguing that “a part” of the solution must be to
lighten the payroll charges employers pay and find compensating
financing for social outlays.
However, there must not be a “brutal fiscal shock” that would
amputate consumers’ purchasing power, given the “considerable efforts”
already demanded of households to contribute to reducing the public
deficit, he cautioned, rejecting a hike in the broad-based CSG tax on
incomes and investment earnings.
Nevertheless, the government will pay attention to the proposals of
industry executive Louis Gallois, whose report will be released
November 5, Moscovici assured.
According to media leaks, the Gallois report will call for a hefty
E30 billion reduction in payroll charges to encourage companies to
invest more. To offset this revenue shortfall, the report is reportedly
set to propose a E10 billion cut in public outlays and a E20 billion tax
hike through a combination of the CSG or the VAT along with
environmental tariffs.
Moscovici also stressed the importance of “long-term” measures
aimed at improving non-price competitiveness, by reducing economic
rigidities, lowering service costs and favoring innovation and
professional training.
“We want a strong policy for competitiveness,” he said.
–Paris newsroom +331 4271 5540; Email: ssandelius@mni-news.com
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