French PM pledges 'deep reform' of tax system

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Embattled Jean-Marc Ayrault, while not promising tax cuts, launches a plan of national consultations to improve the just application of taxes.

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France’s socialist government has promised a shake-up of the country’s onerous tax system in a bid to defuse protests dogging President François Hollande – but has stopped short of pledging tax cuts, reports The Financial Times.

Jean-Marc Ayrault, prime minister, acknowledged on Wednesday that French taxpayers “think they pay too much tax and are not convinced it is efficient for them, the economy or for our public services”.

Mr Ayrault said he would open talks next week on what he called a “deep reform” with trade unions, employer and other representative groups, signalling that some changes would be included in budget plans for 2015.

But he avoided any commitment to a cut in the tax burden, talking instead about a “constant” yield and emphasising the need for greater transparency and simplicity as priorities. Asked specifically by a radio interviewer if his planned reform would mean taxes would fall, he replied: “That depends.”

The surprise move – ministers had previously signalled that a big tax overhaul was not on the cards – followed demonstrations in recent weeks by protesters, including farmers, truck drivers, traders and even equestrian enthusiasts, over imminent increases in value-added and other taxes.

Efforts to date to stem the protests have failed. Thousands of farmers are planning to block roads around Paris on Thursday in the latest protest against a planned “ecotax” on heavy vehicles, despite the indefinite suspension this month of its introduction by the government.

The tax revolts have become the focus of widespread dissatisfaction with Mr Hollande, who is suffering from record low approval ratings and has been booed and whistled at during recent public appearances.

He escaped such derision on Tuesday night when he watched France overturn a two-goal deficit against Ukraine to reach the football World Cup in Brazil next year amid delirious scenes among French fans. The government is clearly hoping that the reform move will also help show that he is in tune with voters on taxes.

Read more of this report from The Financial Times.

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