PARIS (Reuters) - President Francois Hollande's government plans to remove a tax break currently available for banks as part of a package of additional measures aimed at getting the European Commission's green light for its deficit-reduction efforts.
According to the text of a draft mini-budget presented to cabinet on Wednesday, a so-called systemic risk charge paid by credit institutions will no longer be tax-deductible in France, a move which will yield an extra 280 million euros (274.58 million pounds) next year.
The three-year-old charge will gradually be replaced by contributions to an EU-wide banking crisis resolution fund. Those contributions will also be non-deductible.
The French Banking Federation (FBF) immediately urged the government to reconsider.
"It would penalise French banks already subject to high taxes and would be a setback to efforts to fund the economy, vital to restoring growth," it said in a statement, adding it was a "serious breach" of Hollande's pledge not to impose further tax burdens on the corporate sector.
The measure is part of a package aimed at cutting borrowing by an extra 3.6 billion euros in 2015. A new tax on certain second residences and additional efforts to combat tax fraud are also planned.
The government confirmed its forecast of a 2014 deficit of 4.4 percent of GDP for this year. Before the new measures, the deficit was due to fall to 4.3 percent - much higher than the EU-mandated ceiling of 3 percent it had promised for 2015.
(Reporting by Jean-Baptiste Vey; writing by Mark John; editing by Brian Love)