December 12, 2018 / 6:27 PM / a year ago

Big firms could help rein in French deficit - minister

PARIS (Reuters) - Finance Minister Bruno Le Maire said on Wednesday he favoured calling on big companies to contribute to efforts to keep France’s budget deficit as close as possible to the EU limit next year.

French Finance Minister Bruno Le Maire attends the questions to the government session at the National Assembly in Paris, France, December 11, 2018. REUTERS/Charles Platiau

Facing a popular revolt that started out against fuel tax increases, President Emmanuel Macron announced concessions on Monday to anti-government protestors expected to blow a 10 billion euro ($11 billion) hole in the 2019 budget.

That in turn will push the deficit well past the 2.8 percent of GDP expected until now for next year without further measures, breaking through the European Union’s 3-percent ceiling.

“With the additional spending, we are going to surpass 3 percent and want every necessary measure to be taken to keep us as close as possible to 3 percent and ... our European commitments,” Le Maire told lawmakers in the Senate.

“That can be by keeping public spending under control and by (increasing) tax receipts. That can be done by specifically asking big companies to contribute. I’m in favour,” he added.

A source in Macron’s office said after a meeting with business executives that although there were no plans to increase tax on companies, planned cuts could be revised.

Next year corporate tax is due to be cut from 33.3 percent to 31 percent as part of a gradual decrease over the course of Macron’s presidency.

Firms will also benefit from the transformation of a payroll tax rebate into a permanent cut. This is due to add 20 billion euros temporarily to the deficit next year but the government has ruled out pushing it back until later.

Le Maire said a tax on big digital companies - which France could impose from next year if a broader levy is not agreed at the EU level - could raise 500 million euros in a full year.

EU member states failed to agree on a tax on online advertising revenues at a finance ministers’ meeting this month, but agreed to try again early next year.

Reporting by Myriam Rivet, additional reporting by Jean-Baptiste Vey; writing by Leigh Thomas, Editing by Dominique Vidalon and David Stamp

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