December 21, 2017 / 2:08 PM / a year ago

French parliament adopts 2018 budget, which will be Macron's first

FILE PHOTO: French President Emmanuel Macron attends a media conference following a meeting to discuss how to speed up the implementation of the G5 West African counter-terrorism force, in La Celle Saint-Cloud, near Paris, France, December 13, 2017. REUTERS/Philippe Wojazer/File Photo

PARIS (Reuters) - France’s parliament adopted on Thursday the definitive version of the 2018 budget bill, the first of President Emmanuel Macron’s five-year term.

The budget introduces sweeping changes to France’s tax system, notably reducing the scope of the wealth tax to real estate assets, and imposing a flat 30 percent levy on capital income.

Such measures helped fuel criticism from left-wing opponents that Macron was a president of the rich when the bill was first published in September, although it has since died down.

The definitive bill foresees a budget shortfall of 85.7 billion euros (76.12 billion pounds), more than the 82.9 billion originally expected because the state will have to reimburse a cancelled dividend tax.

The government can count on strong tax revenues since the bill was first presented in September to help make up for the difference.

In the original budget bill, the government expected the public sector deficit to come to 2.6 percent of gross domestic product, but it had to revise it up in early November to 2.8 percent after the dividend tax was ruled unconstitutional.

Reporting by Emile Picy; Writing by Leigh Thomas; Editing by Sudip Kar-Gupta

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