Foreign investors’ feedback on France positive - Franck Riester

Foreign trade – Economic attractiveness – Interview given by M. Franck Riester, Minister Delegate for Foreign Trade and Economic Attractiveness, attached to the Minister for Europe and Foreign Affairs, to BFM Business (excerpts)

Paris, 19 April 2021

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Q. – In a way we’ve got your report card this morning, in other words that of France’s attractiveness, thanks to Eurogroup [Consulting], whose report has been widely commented on this morning. So it’s “good, but could do better”. (…) In terms of taxation, among other things, we’ve made progress, particularly the taxation of capital, but in terms of cost and taxes on production, foreign investors are still saying things aren’t quite good enough.

THE MINISTER – Listen, yes, many things have been done. First of all, these results are encouraging, they’re positive, it shows that the people who are ultimately France’s business ambassadors worldwide, France’s Foreign Trade Advisers, recognize that France is on the move, is transforming itself, and they’re getting positive feedback from foreign investors about France’s image. This involves a big effort that has been under way since 2017: reducing the taxation of capital and corporation tax. Let me remind you, after all, that the commitment made to reduce corporation tax to 25% by 2022 will be honoured: it stood at 33% in 2017…

Q. – Will you do it, even if the Americans take the opposite path and Joe Biden announces an increase in corporation tax?

THE MINISTER – First of all, we honour our commitments on principle – it’s a contract of trust with voters –, and secondly because it depends where you’re starting from. We started from much higher, you have to reduce business taxation, and that’s what we’re going to do and stick to: 25% by 2022. And that was the other big challenge to address, namely reducing taxes on production, those typically French taxes that are absolutely counterproductive: investments are taxed even before they’ve created added value.

Q. – But that’s what investors are telling us. They’re telling us: “the French are really kind, they’ve got taxes on production of €70 billion and they’re reducing them by €10 billion”.

THE MINISTER – We’re reducing them by €10 billion this year, €10 billion next year, so we’re continuing the reduction effort. And believe me, when I meet businesses, the ones that have done the calculations – because it’s starting to be done, but initially a lot of businesses hadn’t done their calculations – they’re noticing that it’s a very significant reduction in taxes on production. And we want to continue that effort: it’s absolutely key to ensuring that France is competitive from a fiscal point of view. But it’s not enough. That’s why we must also make businesses’ lives easier and simplify things. There was the PACTE [Action Plan for Business Growth and Transformation] act, there’s the ASAP [Accelerate and Simplify Public Action] act; we must carry on introducing flexibility, and incidentally France’s Foreign Trade Advisers recognize that many things have been done in terms of flexibility, to adapt the organization of businesses…

Q. – That’s true, it’s the other measure being applauded: flexibility in labour law.

THE MINISTER – Exactly, which was one of the big weaknesses in terms of our country’s image, in terms of image and in terms of the reality of organizing businesses. (…)./.

Published on 20/04/2021

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