French finance minister admits taxpayers will be hit

, France’s finance minister, has admitted that most French
taxpayers will be worse off for the first year of a new PAYE tax system.

Under the new system,
would switch from being taxed on previous year’s
earnings to a new system based on current earnings from the start of 2009,
the FT

Breton had said this would amount to a tax holiday in 2008, but admitted
yesterday that because wages increase by 3% to 4%, taxpayers would pay more in
2009 than under the existing system.

‘There would be a small surplus compared to what would have been collected
under the traditional system,’ Breton said.

Breton said this excess would be used to help small companies adapt to the
new system.

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