Chirac Pledges To Continue Cutting Taxes

by Ulrika Lomas, Tax-News.com, Brussels

07 January 2003

Recent reports have revealed that the French President, Jacques Chirac is determined to continue with his tax cutting programme, despite slower than predicted economic growth.

Reporting on President Chirac's New Year Address, delivered on Friday, Reuters revealed that despite the concerns expressed by fellow eurozone members and the European Commission over the country's budget deficit level - forecast to be close to the 3% ceiling at 2.6% this year - the centre-right leader told the National Assembly and Senate that:

'The reduction in income tax and social charges has started, it will be continued.' He went on to add that: 'We must continue this year to do everything in our power to create the conditions for growth, employment, and greater social equality.'

Speaking at a function at his Elysee Palace on Monday, President Chirac reiterated this pledge, announcing that his government will continue to cut income tax and other charges on French labour until the total tax burden is close to the European average.

The French government believes that predicted growth of 2.5% in 2003 will allow it to forge ahead with its plan to cut income tax by 30% over five years. However, opinion among economists and commentators is divided, with many believing that the growth predictions are over-optimistic given the current global economic uncertainty.

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