French Government Moves To Cut Taxes As Election Approaches

PARIS, (UrduPoint / Pakistan Point News -9th Sept,2016) - France's government unveiled Friday plans to lower taxes on households and companies as the ruling Socialists line up their budget for the 2017 election year.

The gesture to households would "take the form of a reduction in income taxes by 20 percent for the middle class," Finance Minister Michel Sapin told AFP. France votes in presidential elections in April and May next year and President Francois Hollande's popularity is so low that he would probably not make it past the first round, according to opinion polls.

He has not said whether he intends to run for re-election. Around 5 million households would benefit from the 1-billion-euro ($1.

1 billion) reduction in income taxes, worth about 200 Euros per family, Sapin said.

He also said that the headline tax rate for small and medium-sized companies would be reduced to 28 percent -- the European average in 2017 and 2018 -- and for all companies from 2020. That is a drop from the current headline rate of 33 percent, although small companies benefit from a lower rate on a certain amount of profits.

However Sapin said that despite the tax cuts France would honour its pledge to the EU to reduce its public spending deficit to 2.7 percent of gross domestic product in 2017.