25 Aug 2011

France to impose higher tax on rich

12:46 pm on 25 August 2011

The government in France will impose higher taxes on the rich as part of new measures to cut the deficit.

France's economy is slowing and forecasts of activity have been revised downwards from 2.25% to 1.75% in 2012.

Financial markets have already questioned France's AAA credit rating and the austerity package aims to cut the deficit by 12 billion euros over two years, to 4.5% of GDP.

A 2% tax increase on those earning more than 500,000 euros per year follows a call by some of the wealthiest people in France for the government to tackle the deficit by raising taxes on the rich.