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50% hike in taxes: French retailers warn against massive job cuts

50% hike in taxes: French retailers warn against massive job cuts

PARIS: French retailers have warned the Socialist government that a planned 50 percent hike of the tax paid by retailers operating commercial surfaces of over 2,500 square meters could lead to massive job cuts in the sector.

The French Retail Federation (FCD) said in a statement that retailers were freezing the implementation of contracts to recruit 30,000 people over three years while waiting for President Francois Hollande to cancel the hike.

Parliament on Tuesday voted the 50 percent rise in the so-called Tascom tax as part of the draft 2015 budget bill, a move meant to bring in an additional 200 million euros to the state’s depleted coffers, and a decision which targets mostly large hypermarket operators.

“In attacking the retail sector, the government is destroying new jobs, notably those of unskilled young people at a time when unemployment is exploding,” the statement said. Hollande has seen his popularity fall to the lowest ratings in French polling history, with a key factor being his failure to live up to promises to tackle unemployment. Employer groups have repeatedly complained about tax hikes and tax instability, despite plans for large payroll tax cuts.

According to French brokerage CM-CIC Securities, the Tascom, which is currently 34.12 euros per square metre, brings in about 600 million euros, with unlisted Leclerc contributing 100 million, Carrefour 70 million euros and Casino 30 million. Budget Secretary Christian Eckert said on Tuesday it was “normal” to tax large retailers more than small store operators “given their market position, their negotiating power with suppliers and the need to protect small retailers in town centres”.