French lawmakers in the lower house have approved a finance bill which includes 13.6 billion euros of tax cuts. The package was one of new President Nicolas Sarkozy’s election promises and he hopes it will spur the country’s economic growth. The measures mean government revenue next year will be reduced by between 10 and 11 billion euros.
They include scrapping income tax and other charges on overtime, a tax deduction for mortgage-interest payments, inheritance taxes to be eliminated for all but the wealthiest, the top income tax rate will fall from 60% to 50% and a tightening of the conditions for so called “golden parachutes” being awarded to company bosses as part of their severance packages.
The overtime tax breaks were welcomed by Jean-Marie Riberpray, manager of top Paris restaurant La Coupole. He said: “This is of particular interest to our workers; this business is tough, very tough on the people in the kitchens and those front-of-house and to be able to work more and to earn more, that’s really something they welcome, to improve and enrich their lives. Traditionally in the restaurant trade, people have always been ready to work hard and long hours.”
The opposition Socialist Party called the package a series of “gifts to the rich” but Economy Minister Christine Lagarde says it should generate an extra half percent of economic growth neat year.