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BIG COMPANIES and the rich will bear the burden of new revenue-raising measures in a highly political budget approved yesterday by French president Nicolas Sarkozy. Just nine months away from a presidential election, France’s high earners will face higher taxes as the government seeks some €12 billion in extra revenue by the end of next year to help bring public finances under control. Unveiling new austerity measures, launched after the country’s growth stuttered to a halt in the second quarter, French prime minister Fran?ois Fillon said: burberry outlet cheap “We have passed the threshold of tolerance on debt.” Though he also scaled back forecasts for growth from 2 per cent this year and 2.25 per cent in 2012 to 1.75 per cent in each of these years, Mr Fillon said the new measures would ensure France could meet its promise to cut its budget deficit from 5.7 per cent of gross domestic product to a marginally better-than-expected 4.5 per cent next year and 3 per cent in 2013. His remarks were clearly aimed at reassuring global debt markets, after investors questioned the stability of France’s AAA credit rating and its ability to cut debt amid slowing growth. Mr Fillon pledged a further €3 billion in savings in the budget for 2013, which will not be decided for another year. However, Mr Sarkozy, whose popularity remains at record lows, also has to reassure a nervous electorate. “The prime minister said the new measures have been decided with the aim of being fair – a necessary feature to avoid street protest,” said Dominique Barbet of BNP Paribas. Mr Fillon said the measures would raise an extra €1 billion this year, in addition to the previously announced €3 billion in extra revenues, and a further €11 billion in 2012. Under the plan, a temporary 3 per cent tax will be levied from this year on all incomes above €500,000, while the social charges on capital income will be increased. The two measures will bring in €1.5 billion by 2012. Gains on property investments, excluding primary residences, will also be taxed more heavily, bringing in €2.2 billion next year. Mr Fillon announced plans to limit the tax breaks given to companies incurring losses. This will not only bring in an extra €1.5 billion for state coffers in 2012, but has the added benefit of helping to harmonise French and German corporate tax systems. Mr Sarkozy and German chancellor Angela Merkel have made this a central element of their proposals for greater European integration. The government will also rein in the benefits for companies of tax-free overtime, one of Mr Sarkozy’s flagship measures introduced after his election in 2007. The burden of the government’s adjustment will fall on companies, which from next year will face charges on the overtime, although workers will not. – (Copyright The Financial Times Limited 2011)