Chirac To Reform Social Security Regime For Businesses

by Ulrika Lomas, for LawAndTax-News.com, Brussels

09 January 2006

Speaking last week, French President Jacques Chirac reiterated plans to reform the country's social security tax regime for employers.

Delivering a speech to representatives from the business community and trade unions, Mr Chirac elaborated on plans to base the social security contributions made by companies to fund health and welfare services for their employees on corporate profits rather than wage bills.

Explaining the flaws inherent in the current system, the President observed, according to the Associated Press, that:

"The more a company hires, the more it has to pay. On the other hand, the more it outsources jobs, the more it runs up social costs and the less it contributes to social protection."

Despite criticism from some quarters that imposing the tax on profits will dampen innovation and investment, Mr Chirac pledged to publish the proposed reforms for consultation by this summer "so that it can be launched by the end of the year".

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