France's Sarkozy to raise VAT rate to 21.2 percent

PARIS (Reuters) - French President Nicolas Sarkozy said in a televised interview on Sunday that his conservative government would seek to raise the value-added sales tax rate by 1.6 percentage points to finance a reduction of social charges on companies.

The planned rise in the VAT rate to 21.2 percent from 19.6 percent, set to come into effect in October, is aimed at boosting the competitiveness of French companies next to German rivals who have much lower social charges.

Sarkozy is rushing through a series of measures aimed at boosting flagging economic growth and stemming rampant unemployment as he prepares to run for reelection in a two-round election on April 22 and May 6.

(Reporting By Alexandria Sage and Catherine Bremer)