PARIS, July 21 (Reuters) - French President Nicolas Sarkozy called on Wednesday for France and Germany to work towards a convergence of their fiscal systems.
In a statement issued after German Finance Minister Wolfgang Schaeuble attended a French cabinet meeting, Sarkozy proposed a joint inventory of the two countries' tax and budget systems to be conducted by the French Court of Auditors and its German counterpart.
The aim was that "our two governments are in a position to take decisions to move towards a necessary fiscal convergence both on business taxation and on personal taxation", he said.
The statement did not spell out whether the two countries would harmonise their tax rates, which are widely different.
France collects less in income tax and far more in indirect taxation than Germany. It also has a wealth tax, abolished in Germany after a constitutional court ruling in 1995.
The overall tax burden in France amounted to 42.8 percent of gross domestic product in 2008, compared to 39.5 percent in Germany. However, French public spending is much higher at 55.6 percent of GDP in 2009 compared to 47.6 percent in Germany.
"The convergence of our fiscal systems is an essential element of our economic integration and the deepening of the European internal market," Sarkozy said.
There was no immediate response from the German side but Schaeuble was due to hold a joint news conference later with French Finance Minister Christine Lagarde. (reporting by Emmanuel Jarry, writing by Paul Taylor)