Banks warn share tax hike threat­ens Paris’ post-Brexit ap­peal

Kuwait Times - - BUSINESS -

PARIS: A pro­posed in­crease in France’s share tax flies in the face of ef­forts by the gov­ern­ment and the fi­nan­cial in­dus­try to lure bank­ing jobs from London, fi­nan­cial sec­tor lob­bies have warned. In a first read­ing of the 2016 bud­get bill, law­mak­ers in the lower house of par­lia­ment backed an in­crease in the tax to 0.3 per­cent from 0.2 per­cent as well as its ex­ten­sion to cover in­tra-day trad­ing.

“This is also a bad sig­nal that we are send­ing in the con­text of Brexit as for the at­trac­tive­ness of the Paris fi­nan­cial cen­tre,” Philippe Bras­sac, head of the French bank­ing fed­er­a­tion and chief ex­ec­u­tive of France’s third­biggest listed lender Credit Agri­cole, told Reuters. Al­though the So­cial­ist-led gov­ern­ment had not in­cluded the in­crease in the orig­i­nal bill, it backed law­mak­ers’ amend­ments to in­tro­duce the in­crease. There is no guar­an­tee that the amend­ment will en­ter into law as it must also be backed in the con­ser­va­tive dom­i­nated Se­nate and in a fi­nal read­ing be­fore the lower house.

Bud­get Min­is­ter Chris­tian Eck­ert es­ti­mated dur­ing the de­bate that the tax would raise ad­di­tional tax rev­enue of 500 mil­lion eu­ros ($545 mil­lion), but ac­knowl­edged that it was un­known how in­vestors might re­act. The pro­pos­als would in­crease French com­pa­nies’ fi­nanc­ing costs, Bras­sac added.

The French gov­ern­ment aims to at­tract busi­nesses leav­ing London fol­low­ing Bri­tain’s de­ci­sion to exit the Euro­pean Union with plans to fast­track the reg­is­ter­ing of firms and ex­tend­ing tax ben­e­fits ex­pa­tri­ates can qual­ify for. How­ever, France’s com­par­a­tively high taxes re­mains an ob­sta­cle as does the So­cial­ist gov­ern­ment’s sup­port for a long-stalled fi­nan­cial trans­ac­tion tax in 10 EU coun­tries which would re­place France’s ex­ist­ing share tax. — Reuters

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