75% tax plan ‘in 2014 budget’

PRESIDENT Hollande’s election promise to impose a 75% tax on salaries of more than €1million a year will be put to Parliament as part of the 2014 budget, Economy Minister Pierre Moscovici has said.

The tax, which will be paid by the employer, will last for only two years and has been modified to get round objections from the Conseil Constitutionnel that it targeted individual income and not the household’s.

However, Moscovici said that, despite his promise last July to prohibit excessive pay rises and bonuses in companies, he would not be bringing in any new proposals to restrict how companies are run.

The government has already introduced a rule in state-owned companies that the maximum salary should not be more than 20 times that of the lowest-paid worker. This will not now be extended to private firms.

After a meeting last week with Laurence Parisot, president of the employers’ federation Medef, and Pierre Pringuet of the CAC-40 companies’ group Afep, he said he would rely on “auto-regulation” to keep salaries in check.

Both Medef and Afep said they would bring in new rules on corporate governance and would act on the government’s demand to launch “Say on Pay” schemes where shareholders vote on bosses’ salaries.

Meanwhile, France, Britain and Germany have demanded new rules to stop multinational companies such as Amazon, Apple and Google from avoiding paying taxes. Speaking at a European summit, Hollande called for coordination at EU level and said "We must come up with strategies to stop this."