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UPDATE 1-French minister sees 10-12 bln euros tax shortfall

Published 01/04/2009, 05:25 AM
Updated 01/04/2009, 05:30 AM

(Adds details)

PARIS, Jan 4 (Reuters) - French tax revenue for 2008 will be between 10 billion euros ($13.9 billion) and 12 billion lower than forecast in the government's original plans, Budget Minister Eric Woerth said on Sunday.

Speaking on Europe 1 radio, Woerth noted the original 2008 budget had forecast 271 billion euros in tax revenue.

"In fact, I think we will be around 260, that's to say there will be a gap of 10 to 12 billion euros compared with the forecast. That's about 5 percent," he said.

Company tax revenue would be about 4 to 4.5 billion euros below initial estimates, while sales tax receipts were also weaker, he said.

He said the 2008 deficit would be impacted by the shortfall.

"We were hoping that the deficit would be of the order of 51 to 52 (billion euros). In fact, it will be around 56 or 57 billion euros," he said, adding that more detailed estimates would be available by the end of the month or early February.

He said 2009 tax receipts would probably be affected as the decline in 2008 revenue would have a knock-on effect.

But he declined to be more specific given the uncertainties ahead and the likely impact of the government's stimulus package, which would cost money but also boost activity.

"We'll see how it turns out," he said, adding there would be no change to the government's 2009 growth forecast of 0.2 to 0.5 percent for the moment. (Reporting by James Mackenzie; Editing by David Holmes)

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