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Sarkozy vows to hike sales tax

French President Nicolas Sarkozy's government vowed on Tuesday to push through increases in sales tax to shift the burden of paying for social security from employers to consumers.

The measure, condemned by opposition Socialists, should be the last key reform of Sarkozy’s first term, and ministers said they would pass it before he stands for re-election in April’s first round presidential vote. 

Under the reform, value added tax will be increased in order to raise funds to allow French employers’ payroll contributions to be reduced, thus helping them compete with producers in lower income economies.

“I think it’s in the interest of our country, in the interest of jobs,” said Labour Minister Xavier Bertrand, a close ally of Sarkozy.

Sarkozy had already signalled in his end of year address to the nation that the measure, long discussed in France but often pushed back, would go ahead.

He said social charges “should not weigh principally on labour, which is so easy to outsource. We should reduce pressure on jobs and seek a contribution from imports, which compete with our products through low labour costs.”

But some economists have warned against the reform, which they say would hit domestic consumer demand, the main motor of the flatlining French economy.

And Sarkozy’s main challenger in the upcoming election, Socialist candidate François Hollande, has said he would not enact the measure, despite it having been championed in the past by some of his supporters.

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BUSINESS

French court hands Amazon €90,000-per-day fine over contracts

French authorities on Wednesday slapped a €90,000-per-day fine on e-commerce giant Amazon until it removes abusive clauses in its contracts with businesses using its platform to sell their goods.

French court hands Amazon €90,000-per-day fine over contracts

The anti-fraud Direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF) service said the online sales giant’s contracts with third-party sellers who use its Amazon.fr website contain “unbalanced” clauses.

“The company Amazon Services Europe did not comply completely with an injunction it was served and it is now subject to a fine of €90,000 per day of delay” in applying the changes, the DGCCRF said in a statement.

It also urged the platform to conform with European rules on equity and transparency for firms using online platforms.

Amazon said the order would harm consumers.

“The changes imposed by the DGCCRF will stop us from effectively protecting consumers and permit bad actors to set excessive prices or spam our clients with commercial offers,” the e-commerce giant said in a statement.

“We will comply with the DGCCRF’s decision but we absolutely do not understand it and we are challenging it in court,” responded the e-commerce giant in a statement.

Amazon said the clauses that the DGCCRF has ordered removed had, for example “prevented the appearance of exorbitant prices for mask and hydroalcoholic gel during the pandemic”.

In 2019, Amazon was fined €4 million for “manifestly unbalanced” contract clauses with third-party sellers on its site in a case brought by the DGCCRF.

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