State must find €10bn extra money

Plugging a huge hole in the 2012 budget will be one of the main aims of a corrective finance bill, to be debated in July

20 June 2012

THE government needs to find an extra €10billion to meet the needs agreed in the 2012 budget at the start of the year.

“It is perfectly true”, said Minister Alain Vidalies when asked if this was the figure they were looking for in Questions d’Info (LCP/AFP/France Info).

However he insisted: “The fact that €10billion is lacking at the end of June is not the responsibility of a government or majority that is in place since May 16... It’s not we who are going to accept responsibility.”

Plugging the gap will be one of the main aims of a “corrective finance bill” to be debated in parliament next month, said Mr Vidalies, whose portfolio covers relations between government and parliament.

It is planned that about €4billion will be saved by axing Sarkozy measures which exempt businesses from paying social charges on employees’ overtime, and which exempt overtime work from income tax.

Other measures planned include:
• Immediately swapping back to last year’s tougher wealth tax banding (though it is not yet clear how it will deal with the fact that many people have already paid their tax for this year and all the declarations have been made),
• A new ceiling on the amount of tax that can be saved through niches fiscales (ways of investing so as to pay less income tax),
• A new tax (possibly 3%) on shareholder dividends,
• Changes to the law on inheritance and gift tax (eg. lengthening the period which must elapse before the gift tax allowance is regained after using up the entitlement).
Photo:© DiMmEr - Fotolia

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