July 31, 2013 / 8:44 AM / 4 years ago

France could freeze income tax brackets to raise revenue: paper

PARIS (Reuters) - France’s cash-strapped government may freeze income tax thresholds next year as a way to raise additional revenue, Les Echos business daily reported on Wednesday.

Finance Minister Pierre Moscovici dismissed the report as speculation, saying various options were being studied in preparation for the 2014 budget bill.

President Francois Hollande’s Socialist government needs to raise an extra 6 billion euros ($7.95 billion) in revenue next year and is seeking the right balance between belt-tightening and tax hikes.

Les Echos said the government was looking at freezing the country’s six income tax brackets for a third year in a row.

Not adjusting the level at which the various tax rates kick for inflation effectively increases taxes and could yield an estimated 1.4 billion euros extra this year, Les Echos said.

The paper said raising the CSG social security tax was also under consideration, as was lifting environmental taxes.

“There are lots of scenarios” being studied, Moscovici told RTL radio. “Our tax policy is to refuse generalized, blanket tax increases.”

Declining to comment further on the report, Moscovici said new measures would be decided at the end of August, before the drafting of the 2014 budget bill, due in late September.

Hollande has pledged to limit tax increases after a series of hikes since he came to office in May 2012 which targeted mainly the wealthy and big companies.

The government is struggling to cut its public deficit to 3.7 percent of economic output in the face of faltering growth.

Reporting by Leigh Thomas; Editing by Catherine Evans

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