François Hollande’s government is to tax
French high net worth individuals (HNWIs) a total of €2.3bn
($2.8bn), to tackle the country’s deficit.
The new elected French president unveiled a
plan to impose a one-off levy on people whose net wealth is higher
than €1.3m year, as part of a €7.2bn tax package.
Go deeper with GlobalData
The French government also announced increases
in taxation on inheritance, company dividends, stock options and
holiday homes.
The plan is to cut France’s deficit target as
a percentage of GDP from 5.2% in 2011 to 4.5% in 2012.
75% tax scares HNWIs
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By GlobalDataThe measure is the first step towards the
sharp increase in wealth taxation promised by Hollande during the
electoral campaign.
The French president said that by 2013 the
marginal rate on annual incomes of more than €1m will be raised to
75%.
If implemented the tax could lead to numerous
HNWIs leaving the country.
Neighbouring nations, including Switzerland
and the UK, have said they are ready to welcome this outflow of
capital.
In February 2012, in a statement addressed to
French financial workers, London mayor Boris Johnson said:
“Bienvenue à Londres. This is the global capital of finance. It’s
on your doorstep and if your own President does not want the jobs,
the opportunities and the economic growth that you generate, we
do.”
