Fillon Targets French Tax Breaks

by Ulrika Lomas, Tax-News.com, Brussels

07 May 2010

Determined to reduce the country’s budget deficit, which has inevitably widened significantly as a result of the economic crisis, France’s Prime Minister François Fillon has confirmed government plans to realise EUR5bn in savings over the course of the next two years by urgently addressing the issue of tax breaks in France.

While ruling out any plans to implement austerity measures, Fillon nevertheless emphasized the need to cut public spending in France, and underlined the fact that addressing the issue of tax breaks is currently a key priority for the government, and a problem which he personally plans to resolve during the next government meeting, due to take place shortly, and designed to establish the budget for both 2011 and 2012.

Acknowledging the fact that any changes to existing tax breaks in France would prove “difficult,” Fillon reassured the nation by vowing that France would emerge from the crisis ahead of Germany in terms of growth, noting that the number of significant reforms carried out recently in France reflects the fact that France has made the most effort in the whole of Europe to modernize, and consequently is now reaping the best results.

Alluding to the – recently abandoned – carbon tax plans of the government, Fillon admitted that the government had certainly committed some errors. He regretted the fact that the country’s Constitutional Court made it impossible to implement the tax, while at the same time conceding that the government could have done better to prepare for the tax.

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