- CNTV English - CCTV News

France hikes taxes to boost competitiveness

01-30-2012 13:50 BJT

Watch Video

Play Video

On Sunday, French President Nicolas Sarkozy and his conservative government announced a hike in the consumption tax, or the V-A-T, as well as a 0.1 percent tax on financial transactions set to take effect in August.

The increase aims to lower the country’s fiscal deficit as well as the salary expense of French companies, which hopefully will make their products more competitive on the global stage.

France's President Nicolas Sarkozy, seen in this still image from video, as he
appears on French national TV in Paris, Jan. 28, 2012. Sarkozy was expected to
announce new economic reforms to creat more jobs.

France’s jobless claims are at their highest since September of 1999. The country is looking for an answer to reignite its industrial base and boost its work force. Their solution, as proposed on Sunday by French President Nicolas Sarkozy, is an increase in the value-added-tax by 1.6 percent and levying a 0.1 percent tax on financial transactions.

Sarkozy said: "The need we have to pay off our debts, to reduce our spending, to increase our competitiveness - credit rating agencies or not - is clearly there"

The government plans to use the increase in tax revenues to help finance a cut in payroll charges paid by employers, thereby lowering the high cost of labor in France and making French products more competitive. The new revenues will also help in reducing the country’s large deficit.

Critics say, the brunt of the increase will unfairly be shouldered by lower wage earners - but Sarkozy argues that this is the only "credible solution" .

Sarkozy said: "I am convinced that this decision we are taking (increasing the VAT) will save jobs and it’s the only credible answer to the end of out-sourcing. France is drained of its industrial blood. We must stop that."

Polls show the higher tax to be unpopular and with presidential elections set to take place in April and May, Sarkozy is willing to gamble, that in the end, the French will support a leader that makes tough choices to jolt France out of its lackluster growth and high joblessness.


Editor:Zhang Rui |Source: CNTV.CN

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program