Expressing grave reservations regarding recent government proposals to implement temporary, targeted, value-added tax (VAT) cuts, notably in the car industry, Gilles Carrez, rapporteur for the French National Assembly Finance Committee, has called instead for the government to urgently consider other initiatives, such as implementing a tax on stock options, as a symbolic gesture.
According to Carrez, revival of the French economy firmly hinges on investment, and, therefore, job creation. Opposed to VAT reductions, given the limited benefits that this measure provides, Carrez favours measures seeking to impose a tax on stock options, golden handshakes, bonuses, and dividends – an idea previously rejected by Parliament.
Regarding sectors particularly hard-hit by the global economic crisis, in particular the car and construction industry, Carrez sets forth a number of alternative, sector-specific initiatives, intended to stimulate activity.
With sales of private property flagging, Carrez advocates encouraging investment in rented accommodation, by revising the existing Robien and Borloo initiatives.
Both measures aim to provide tax relief for rented property investors, by enabling part of the cost of the property to be ‘absorbed’ or deducted from rental income. By implementing tax reductions instead, amounting to around 15-25% of investment, spread over five years, and capped, the simplified, ‘transparent’ system would, Carrez maintains, benefit middle-income earners. Similarly, improving the scheme of zero-rate loans, is a further move intended to facilitate access onto the property ladder for first-time buyers.
Proposals designed to boost the car industry, detailed by the parliamentary rapporteur, include a measure to create zero-rate loans for young households buying a car, and a move to consolidate the system of awarding bonuses to the purchasing of environmentally-friendly vehicles.
With regard to other sectors, Carrez outlines two further initiatives. Firstly, accelerating the period in which tax-credit research payments are settled. Secondly, reducing delays in administration payments to businesses.
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