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