Valls promises tax cuts for three million French households

Prime Minister Manuel Valls has promised tax cuts for 1.8 million French households this year, following the Socialist Party’s poor showing in March’s local council elections. The measure will be worth one billion euros.

French Prime Minister Manuel Valls Reuters/Philippe Wojazer

On Sunday Valls announced that 650,000 extra households would be exempted from paying tax but on Friday he almost tripled the figure.

In total three million households will be affected by a change to an amendment to the budget that will be debated in June, Valls told Europe 1 radio, and 1.8 million will end up paying n tax at all.

The majority of the loss to the exchequer will be made up by a clampdown on tax fraud, he claimed, insisting that the measure does not contradict the government’s promise to reduce the budget deficit.

“We have to lower debt, we have to lower the deficit and we have to cut taxes,” he said. “The two are connected because we have to favour competitiveness.”

The measure will aim to reverse an increase in the number of French people paying tax – from 17 million in 2010 to 20 million today, according to Valls.

Shaken by poor local council elections, a number of Socialist MPs protested at the cuts in the budget adopted after Valls became prime minister and the government promised to take action to help those on low incomes.

Single people earning less that 14,000 a year, childless couples on less than 28,000 euros and couples with three children on less than 38,000 euros will no longer be liable to pay tax, the prime minister’s office says.

Valls denied that the measure was intended to stave off humiliation in this month’s European elections but did admit that it was influenced by “the message the French people sent us” in the council polls.