France to increase temporary business levy - ministry
PARIS, Oct 8 (Reuters) - The French government aims to raise an existing temporary levy on large companies' profits to offset lost revenues from scrapping another business tax, the budget ministry said on Tuesday.
The government will raise the levy on companies with revenues over 250 million euros ($339 million) to 10.7 percent from 5 percent currently, a ministry official told Reuters.
The move should bring in 2.5 billion euros to state coffers, offsetting the impact of abandoning a new tax on operating profit included in the 2014 budget.
Angering some fellow Socialists in parliament, Finance Minister Pierre Moscovici scrapped plans on Sunday for the operating profit tax, only weeks after presenting it, following criticism from business leaders.
The surcharge comes on top of companies' corporate tax, which is already among the highest in Europe with a standard rate of 33.3 percent. Many firms pay much less because of various tax breaks.
Moscovici has pledged not to add any more to companies' overall tax burden over concerns that any more fiscal pressure would add to high labour costs in France and threaten jobs.
After introducing 30 billion euros in new taxes since coming to power in May 2012, the government intends to limit new increases in its 2014 budget and focus on reining in spending.
The Socialist government aims to cut the public deficit to 3.6 percent of economic output next year from an estimated 4.1 percent this year.
The 2014 budget goes before the lower house of parliament's finance commission for a first reading on Wednesday and is unlikely to be voted into law by both houses before December. ($1 = 0.7368 euros)
(Reporting by Jean-Baptiste Vey; writing by Leigh Thomas; Editing by Jon Boyle)