France accepts the austerity measures of the budget

27.12.2011

In 2012 France plans to cut state budget deficit. The mechanisms of this reduction are based on strengthening the control over public spending and tax breaks cutting.

The approved budget project of France for 2012 provides the introduction of 3% tax rate for those persons whose annual income exceeds EUR 500,000, a tax on beverages with added sugar and artificial sweeteners.

Also the text of the project contains reduction of tax breaks wholly by 15%. Let’s note that this reduction was originally planned by 10%. Moreover, part of the grounds for obtaining tax breaks will be abolished in 2013 total in the amount of EUR18, 000.

Budget draft for 2012 primarily aims to reduce the existing deficit and to maintain competitiveness of the state in the international arena.

Expert’s opinion

“France is not the first country in Europe that took austerity measures of the budget for the next several years. For example, Italy and Spain went the same way. Of course taking into consideration frequent mass protests, cutting and then completely elimination of some tax breaks will not find support among the citizens of France. However, without these measures it’s impossible to overcome the negative impact of the crisis that expressed in the growth of government debt and huge government expenditures”.

On the basis: www.tax-news.com

Andrianova Irina ( the leading lawyer of legal support and banking consulting department of Honest&Bright)