January 12, 2018 / 9:58 AM / a year ago

French finance minister pledges 'no new taxes' under Macron

French Finance Minister Bruno Le Maire leaves the Elysee Palace after the first weekly cabinet meeting of the year and a government seminar in Paris, France, January 3, 2018. REUTERS/Benoit Tessier

PARIS (Reuters) - Emmanuel Macron’s finance minister said on Friday there would be no new taxes during the president’s five-year mandate, which runs until 2022.

Bruno Le Maire said a sizeable housing tax Macron is steadily reducing will be totally scrapped once a way has been found to ensure local authorities are compensated for the expected revenue loss of around 20 billion euros.

“There will be no new taxes during the mandate,” Le Maire told BFM news television channel.

Macron, a 40-year-old former investment banker who took office in May, has promised to shrink France’s public sector deficit for the first time in years, bringing it down to the euro zone’s agreed target of below 3 percent of GDP.

To achieve that, public spending will likely have to fall since Le Maire is promising no tax increases.

However, stronger economic growth will also help, since it swells government revenues from existing taxes and increases the overall size of the pie - reducing the size of the deficit relative to GDP.

Le Maire, who abandoned France’s conservative Les Republicans party to join Macron’s government, was categorical in his pledge to keep a lid on taxes.

“We’re not going to scrap one tax only to invent another in its place,” he said. “You cannot put money in French people’s pockets and take it back with the other hand. There will be no creating of new taxes.”

France’s central bank is predicting that GDP, which grew by around 1.8 percent last year, the strongest since 2011, will continue to expand at a roughly similar rate over the coming three years.

Reporting By Brian Love and Myriam Rivet; Editing by Luke Baker and Alison Williams

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