Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Iraq's Christians - Nowhere to Run? (part 2)

Read more

DEBATE

Iraq's Christians - Nowhere to Run?

Read more

MEDIAWATCH

Towards a "Third Intifada"?

Read more

FOCUS

What solutions for California's overcrowded prisons?

Read more

MIDDLE EAST MATTERS

Gaza conflict: Palestinians mark sombre Eid

Read more

WEB NEWS

Celebrities in the Israel-Gaza crossfire

Read more

IN THE PAPERS

Israeli strike takes out Gaza power station

Read more

IN THE PAPERS

French newspaper apologises for Sarkozy story

Read more

BUSINESS DAILY

Last-ditch talks aim to avert Argentina default

Read more

  • Video: Inside Hamas ‘terror’ tunnels in Gaza

    Read more

  • Scores feared dead in India landslide

    Read more

  • Russia defiant as US, EU unveil 'phase three' sanctions

    Read more

  • Israel says it is 'days' from completing Gaza tunnel hunt

    Read more

  • US House votes to sue Obama for over-reaching his powers

    Read more

  • Argentina fails to reach deal with holdout creditors

    Read more

  • Women should not laugh in public, Turkey's deputy PM says

    Read more

  • Suspect in Jewish Museum attack charged with 'terrorist' murder

    Read more

  • Fourth female suicide bomber targets Nigerian city

    Read more

  • US rebounds to 4% growth in second quarter

    Read more

  • Video: Coping with rocket attacks in Israel’s Sderot

    Read more

  • Rats on the rampage at Louvre museum gardens

    Read more

  • France evacuates nationals, closes embassy in Libya

    Read more

  • 'Compelling' signs Kosovo leaders trafficked organs, prosecutor says

    Read more

France

Sarkozy asks for a cut in tax on eating out

Text by FRANCE 24

Latest update : 2009-04-28

French President Nicolas Sarkozy has asked his country’s lawmakers to approve cut in VAT to 5.5 percent for the restaurant industry as of July 1, the Elysée Palace announced in a statement.

French President Nicolas Sarkozy has asked his country’s lawmakers to approve a huge cut in VAT for the restaurant industry as of July 1, the Elysée Palace announced in a statement.

The move would see value-added tax for the country’s restaurants fall from the current 19.6 percent to 5.5 percent. In return, the industry pledges to reduce prices and boost hiring as part of a deal to be signed today at the finance ministry, where the catering sector’s "states general" are being held.

The industry has been lobbying government for a tax cut for years. Following earlier pledges by his predecessor, Jacques Chirac, Sarkozy promised to push his European counterparts in Brussels for a cut. The European Union finally issued a green light last year.

The French presidency says the agreement reached with industry representatives includes commitments to "reduce prices, create new jobs, add 20,000 junior trainee positions, improve working conditions and modernise the sector".

If applied by July 1, the VAT cut is expected to take 1.2 billion euros out of this year’s budget and to cost 2.5 billion euros a year thereafter.

According to France’s minister for industry, Hervé Novelli, restaurant owners will reduce the price of many items on their menus by 10 percent.

The agreement is also expected to lead to a new round of negotiations on wages and social security, as well as a crackdown on the black market. France’s leading unions have decided to boycott the states general, however, pointing to insufficient social measures.

Eleven of the 27 EU member states have decided to reduce VAT in the restaurant industry, which employs 900,000 people in France.

Date created : 2009-04-28

COMMENT(S)