France to boost domestic production with tax breaks, PM says - Metro US

France to boost domestic production with tax breaks, PM says

New French PM speech at the National Assembly

PARIS (Reuters) – France will cut domestic business taxes to help companies weather a coronavirus crisis that has underscored the country’s over-dependence on imports, new Prime Minister Jean Castex said on Wednesday.

Outlining his policy priorities, Castex did not say how the tax relief – long sought by companies – would be financed but said that French taxpayers would not be called on to pay more.

“The crisis has confirmed that we must now transform our industry,” Castex said in his first appearance before lawmakers since his July 3 appointment at the head of President Emmanuel Macron’s reshuffled government.

“We will ease taxes that weigh on producing in France,” Castex added.

A 100-billion-euro ($114 billion) economic recovery package to be discussed with employers and unions on Friday will include 40 billion in support for domestic industry and services including tax breaks, he said.

Production taxes are a raft of levies companies must pay in France on top of the normal corporate income tax and are imposed on things such as commercial and industrial property and also include a contribution to value added.

The finance ministry estimates production taxes are worth a combined 77 billion euros ($88 billion) – twice the EU average and seven times more than in Germany – and French firms often complain they are a major problem for their competitiveness.

(Reporting by Laurence Frost and Leigh Thomas; Editing by Mark Heinrich, William Maclean)

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