The French government said yesterday it would maintain its current budgetary policy in 2003, promising that cuts in corporate and income tax would continue next year.
"From 2003. . . reductions in taxes on households and on companies will continue," government spokesman Mr Jean-Francois Cope said. "There is no question of changing direction as far as tax cuts are concerned."
New right-wing Prime Minister Mr Jean-Pierre Raffarin had said on Monday tackling social security contributions was a "priority", leading some observers to conclude that tax cuts could drop lower down the government agenda.
But Mr Cope said there was no order of priority for cutting employers' contributions, income tax and corporate tax.
Conservative President Mr Jacques Chirac, re-elected in early May, has promised to cut income tax by 30 per cent by the end of his five-year term.
Mr Cope said the precise extent and timing of the tax cuts would be based on estimates of economic growth. He declined to say what growth estimate the government would set for the 2003 budget, a draft version of which is due to be discussed by the cabinet later this month.
Asked whether France might renege on its commitment, under the European Union's Stability and Growth Pact, to eradicate its budget deficit by 2004, Mr Cope said: "For the moment, we're not there yet." - (AFP)
