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75% tax burden shifts to business

Firms will be hit with levy on incomes over €1million as Hollande gives TV interview

PRESIDENT Hollande has shifted the burden from individuals to businesses as he pledged last night to go ahead with plans for a 75% tax on incomes over €1million.

In a TV interview, the French president said he would force companies to pay the headline 75% levy. Shareholders would have the choice to pay managers less than €1million or keep remuneration high and pay the tax.

The change of plan comes after the conseil constitutionnel struck down the initial plan to tax individuals at the 75% rate, which it said was unfair because it applied to individual taxpayers when income tax in France is assessed on a household basis.

Hollande's TV appearance follows successive opinion polls showing declining popularity.

He used the interview to pledge to cut French bureaucracy - especially for start-up companies - and freeze personal income tax for two years.

He also reiterated the pledge he made in his new year address to stop unemployment rising.

Among the other measures announced were a change to the way some means-tested benefits are calculated - however Hollande ruled out suggestions that child benefit could be subjected to income tax.

He said a new draft law on secularism (laïcité) would be drawn up, following a high profile employment tribunal case in which a creche worker appealed against being sacked for wearing a veil.

Hollande also said troops would start to withdraw from Mali - with just 2,000 remaining by the end of July and 1,000 by Christmas. France's defence budget would not be cut.

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