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Economy

New French super-rich tax to be introduced by autumn

media Jérôme Cahuzac, the French Junior Budget Minister. Reuters/Philippe Wojazer

The French government will introduce, by autumn, a new tax for incomes over one million euros a year to replace an original law for a 75 percent tax rate that was struck down by the country’s highest court.

The declaration came as French actor Gérard Depardieu received his Russian passport as part of a row with the government.

Jérôme Cahuzac, the Junior Minister for the Budget in the French finance ministry, told French media on Sunday the new tax will be part of this year’s finance law, which presents the revenues and expenses of the French state.

If approved, the tax will be included in the government’s budget for 2014.

“We have, with [Finance Minister] Pierre Moscovici, received a mandate to suggest something that will be accepted by the government and be discussed by the parliament,” he said in a televised interview with media outlets Europe 1, i-télé and the newspaper Aujourd’hui en France.

“I can’t say today when the new finance law will go before parliament…[but] by next autumn at the latest,” he continued, adding the government would like to see any approved measure be applied as son as possible.

A 75 percent tax on incomes over one million euros was one of President François Hollande’s key election promises, and formed the centrepiece of France’s 2013 budget.

But the Constitutional Council ruled late last month the law was unconstitutional because it was calculated on individuals rather than households, thus creating inequality.

It is not clear whether the new law would maintain a tax rate of 75 percent, but the Prime Minister, Jean-Marc Ayrault, has said the government is committed to that figure.

Cahuzac also left opened the possibility of the tax being a permanent measure.

“I think it can be one of the factors to be considered: either it can stay temporary – two years – like the rejected measure, or it can be for the whole [of the government’s] term, or why not extended [it] and become an ongoing measure,” he said.

The tax on the super-rich has prompted high profile people such as Depardieu to threaten leaving France and avoid the tax.

There has also been a spike in the number of people applying for residency and citizenship in Belgium, where the tax rate is lower.

Cahuzac also repeated the message that 2013 will be a difficult year for the country’s finances.

“We are asking for a considerable effort in 2013. Fiscal reform has been voted on and I think we can’t ask any more from our taxpayers,” he said.

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