France to launch tax credit for businesses

PARIS - French Economy Minister Pierre Moscovici on Wednesday defended the tax credit for companies that will be launched at the beginning of next year, emphasizing the urgent need of this measure.

The tax credit will start from Jan 1, 2013, by 4 percent of company's gross payroll, and then increase to 6 percent in 2014.

"We thought the employment situation was so worrying, the recovery effort was necessary as enterprises expectations are now so high," the minister said at a press conference shortly after the cabinet meeting.

During the weekly meeting of the Council of Ministers, the French minister unveiled the content of the amendment to the tax credit for competitiveness and employment (CICE), which shall be added to the draft supplementary budget for 2012.

The CICE is a measure aimed to help primarily small and medium enterprises (SMEs), and then extend to large companies to reduce labor cost and improve employment.