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. Last Updated: 07/27/2016

Gaullists Hold Out Tax Carrot

PARIS -- French Premier Alain Jupp? promised Tuesday that if conservatives retain a majority in legislative elections a program to lower business taxes will be enacted within six months.


The tax reforms could come as soon as 40 days after the June 1 final round of the elections, Jupp? said on French radio. He reiterated the government's plan to lower income taxes by 75 billion francs ($13.4 billion) over five years.


With the May 25 first-round vote less than two weeks away, politicians were launching seduction campaigns to attract voters who, according to polls, have shown little overall interest in the early elections.


Socialist Party leader Lionel Jospin is expected to clearly outline the left's program this week.


Jupp?'s government had promised a tax reform program before conservative President Jacques Chirac announced the early elections on April 21.


Speaking in a 40-minute question-and-answer session, Jupp? said small- and medium-sized businesses, such as shoe stores or construction companies, would benefit from tax reductions like those previously applied to the textile sector.


Under the plan, Jupp? said, those businesses will see reductions in their social security payments. The plan also includes lowering taxes on creating new small businesses in order to spur growth.


His tax reform plan also includes a reduction in social security charges paid by employees through a lowering of medical insurance costs. He said the government's plan to overhaul social security is about 90 percent complete.


The tax plan also would include changes in the way the professional tax levied on most French businesses is calculated, Jupp? said.


Jupp? said that Europe, and the planned European single currency set for 1999, are important for French stability and growth. "We need to do the euro. It is both an instrument of stability and of growth,'' he said, adding that the euro-dollar parity must be "realistic.''


"The parity between the dollar and the euro should ... correspond to [ fundamentals] and permit us," Jupp? said, "to defend ourselves against international competition and to create jobs.''