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The "territorial economic contribution" will replace the business tax

The

promise has stood in one sentence. Seven months after announcing the elimination of business tax by Nicolas Sarkozy, the modalities of this reform are slow to be adopted. The final arbitration of the President of the Republic have been postponed to the end of August.

sign of the difficulty of the exercise: a 83-page text, prepared by management of the tax legislation of the Ministry of Economy was sent Monday, August 3, leaders of associations of elected officials, leaders of employers' organizations and the parliamentary finance committee. They have until August 24 for their remarks before the discussion of the project by the State Council. The puzzle is more complex than this reform, which covers 22 billion, foreshadows the wider issue of funding local authorities. Although still incomplete

, the text specifies alternatives for the business tax now called "territorial economic contribution." At the request of elected officials who want to maintain the link between firms and territories, maintains property tax reform on right, otherwise referred to as "social contribution activity. The rate should be reduced by 15% for the industrial sector. This tax would be decoupled from the additional levy on the value-added tax base would be expanded. Currently amounting to 1.5%, it relates to the companies making sales above 7.6 million. As it stands, the text does not specify the tax thresholds or rates that would determine the "winners and losers, by size and sector of activity.

This reform is accompanied by a redistribution of local taxes and transfers and compensation paid by the state. Communes and intercommunal structures retain much of the four "old" (Tax housing, land and buildings on undeveloped and their share of economic contribution). Departments would lose their share of housing taxes and undeveloped land reserved for common to keep only the land built businesses. With the regions, they would enjoy for most of their revenue from new tax economic as well as allocations and transfers from state taxes on the proceeds of retail space and insurance.

This reform would also effectively put an end to 10.8 billion tax relief granted by state enterprises, which must be compensated.

Delberghe Michel / Le Monde