THE Sarkozy Govt's proposal to hike the luxury tax has met with a
strong protest from the Hotel Unions, which fear that such a hike would punch a
major blow to the competitiveness of tourism in France. The Unions have argued
that it has taken long time for this sector to get out of the bad phase, and any
move to tax it more would be a serious setback.
With
the rising fiscal deficit, the Govt had planned to hike taxes on certain
sectors. Since it abandoned the proposal to hike VAT on theme parks it decided
to rope in the hotel industry to compensate for the revenue loss. But, it is
certainly not going to be a cake walk for President Sarkozy.
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