Senate throws out VAT hike
The ‘social VAT’ plan would not create new jobs and could even destroy some, senators said
THE government’s “social VAT” plan has been rejected by the Senate in the latest swipe in the parliamentary ping-pong between the left and right.
It was voted out 174 to 157 – along with the rest of the Corrective Finance Law for 2012, which includes a tax on financial transactions, measures relating to apprenticeship and the creation of a bank of industry. It was voted through the National Assembly earlier in the week.
Socialist finance spokeswoman in the left-wing dominated Senate Nicole Briq said: “Why pass a law today on measures that go against the ideas that we will be putting in place in the future?”
She said the “social VAT” – which means raising the basic rate from 19.6% to 21.2% on October 1 so as to lighten employers’ social charges – would have no effect on jobs and could even cause some to be lost.
Budget Minister Valérie Pécresse denied the claims, saying, on the contrary, the plan – along with other measures in the bill – would “allow us to make another major advance in competitivity” and “create 100,000 jobs”.
The bill will now be discussed in a mixed commission of seven MPs and seven senators before it goes back to the National Assembly, which will have the final say.
