French report to urge payroll tax cuts: media
October 21, 2012, 12:01 am TWN
PARIS -- A government-commissioned report will urge France to cut 30 billion euros (US$39.09 billion) in payroll taxes over two to three years to increase the country's competitiveness, newspaper Le Figaro said on its website on Friday citing unnamed sources.
The lost revenue would have to be covered by massive cuts in public spending — far beyond the 10-billion-euro savings envisaged in the 2013 budget — as well as rises in VAT and the CSG levy that helps to fund France's social security system, the newspaper said.
The report by Louis Gallois, former chief of aerospace group EADS, will say the sharp reduction in labour costs would give a necessary jolt to France's economy, according to Le Figaro.
French business leaders have long called for a decrease in payroll taxes, which rank amongst the highest in the world.
Gallois' report on French competitiveness, which was commissioned by Hollande, is due out on Nov. 5.
Sources told the newspaper the report would call for labour costs to be lowered over the next two to three years — with 20 billion euros coming off charges paid by employers and 10 billion off those paid in by employees.
The cuts would only apply to wages up to 3.5 times the minimum wage, currently set at 9.4 euros an hour before tax, or 1,425.67 euros a month, the website said.