French president faces VAT challenge
French president faces up to government's plan to up VAT rate, calling for a study to loook at the effect of such rises in other countries
New French president Nicolas Sarkozy is battling against proposals by his
government to raise VAT.
The French government is planning to raise VAT by 5% to 24.5% to help reduce
the burden of social security payments on companies, but Sarkozy said he would
not accept a VAT rise ‘in its current form’, reported The Guardian.
He said he did not want to decrease French buying power, and that no decision
on a VAT rise would be made until the effects of VAT increases in other
countries was studied.
President Sarkozy has previously stated he would look
to cut taxes, including providing tax incentives to workers.