Will offset growing deficit in the social security system
Accountancy Age, 26 Sep 2007
Investors in France are likely to be hit with a new tax on dividends with the government confirmed plans for its implementation.
The proposed tax on share dividends is expected to raise around £1bn next year, the Health Ministry stated as it announced the budget for the social security system for 2008.
News of the new tax comes as concerns mount over the continued deterioration of France's public finances following warnings from prime minister Francois Fillon that the budget is in a 'critical' state with the government effectively in 'a state of bankruptcy'.
At the same time president Nicolas Sarkozy is trying to push through radical reforms of the French tax, welfare and labour market systems, in an attempt to create more of an enterprise culture and boost economic competitiveness.
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