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Last updated: September 8, 2012 6:09 pm
Bernard Arnault, France’s richest man, fuelled the controversy over François Hollande’s plan to impose a 75 per cent marginal income tax rate on Saturday, when he revealed he was applying for Belgian citizenship.
But the revelation sparked immediate reaction from the centre right opposition, which said the socialist president’s policies were to blame.
“When you take stupid decisions you get these troubling results,” said François Fillon, prime minister under former president Nicolas Sarkozy.
“The head of one of the best businesses in the world, which symbolises French savoir faire and success, known the world over, may be led to change nationality because of the tax policy followed in this country. It is disastrous.”
Mr Arnault, who emigrated to the US during the last Socialist presidency in 1981, issued a statement after a report in Belgian newspaper La Libre Belgique confirming that he was applying for Belgian citizenship, but said he was seeking dual French-Belgian nationality. “He is and will remain tax resident in France,” the statement said.
It said the decision to take Belgian citizenship was related to his many personal investments in Belgium through his private company Groupe Arnault.
A person close to Mr Arnault pointed out that it was not necessary to take Belgian citizenship to become a tax exile there. He said Mr Arnault intended to develop his business interests in Belgium with the Belgian entrepreneur Albert Frère, a close associate, and having dual nationality would help him do so.
When you take stupid decisions you get these troubling results
- François Fillon, former prime minister
Nevertheless, the news was set to deepen the controversy over the president’s election pledge to tax income above €1m a year at 75 per cent.
Mr Arnault, last week held talks with Jean-Marc Ayrault, the prime minister, at which the government’s plans to raise taxes on the wealthy were reportedly discussed.
Business leaders have for weeks expressed concern that the 75 per cent rate – and other increases in wealth, capital and corporate taxes – could damage investment and drive high earners out of France.
David Cameron, the British prime minister, irritated the government when he said he would “roll out the red carpet” for French people fleeing the new tax.
On Friday, Mr Hollande and his senior ministers insisted that the 75 per cent pledge would be fulfilled in the budget for 2013 due to be published later this month.
They were responding to media reports that the tax would in effect be watered in the face of business concerns by limiting its scope and duration and allowing exemptions.
Ministers said no final decisions had been made on the terms of the tax.
The government is meanwhile under pressure on left not to back down. The Durable Left faction of the socialist party called on Mr Hollande not to relent in the face of the super wealthy who it said were only interested in their own enrichment.
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