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Arnaud de la Tour, President of the Association of Temporary Employment Agencies (PRISME), has voiced his concern that the business tax reform planned for 2010 would strongly penalise temporary employment agencies, Agence France Press reports.
The current business tax (Taxe Professionnelle), which is deemed to be unfair is to be replaced with two other forms of tax, one of which is based on revenues.
"In general, the tax reforms are very good for French companies but I am very concerned about its impact on labour intensive industries like temporary employment, security and distribution," de la Tour said.
PRISME General Secretary, Francois Roux added, "the new tax will have to take the salaries temporary employment agencies pay into account. Salaries and social security payments account for 85% of temporary agencies turnover.
So far, businesses with a turnover of less than 7.6 million Euro were exempt from business tax. The proposed new tax will start at 500,000 Euro. This will particularly hit small and medium-sized temporary employment agencies.
De la Tour says further, "we would like to obtain concessions from the government, namely a cap on the amount of tax paid."
The new tax would lead to increased prices for temporary staff and financially more fragile agencies would not be able to survive.
The French government is not deaf to the concerns of PRISME. The final decision will be made "over the next few days," the government said.