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France To Tax Bankers' Bonuses

by Ulrika Lomas,, Brussels

15 December 2009

Following Britain’s recent decision to introduce a one-off "supertax" of 50% on financial sector employees’ bonuses in excess of GBP25,000, France has revealed its latest plans to impose an exceptional taxation on bankers’ bonuses.

Although the precise details of the tax have yet to be determined, the government aims to include the measure in the supplementary finance bill, to be presented to parliament at the beginning of next year.

Defending the French government’s latest decision, President Nicolas Sarkozy explained the need to tax bankers’ bonuses on both sides of the English Channel. By taking a joint decision, Britain and France expected other countries to follow suit, he added.

Determined to lead the way with Britain in a sea of change, President Sarkozy made known that he has already received growing support for the measure from other heads of state.

French Finance Minister Christine Lagarde also justified the exceptional tax, highlighting the fact that considerable financial support has been accorded to financial sectors in France this year, as indeed in many other countries.

In the wake of the global financial crisis, Lagarde emphasized the need to supervise and “bring to reason” financial centers all over the world.

German Chancellor Angela Merkel welcomed the joint proposal, referring to the idea as “charming”, and reiterating that not only taxpayers, but also banks and their employees, should bear the financial burden of the economic crisis.

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