June 3, 2013 / 7:19 PM / 6 years ago

French self-employed threaten to boost jobless register in tax protest

PARIS (Reuters) - Self-employed French workers angered by plans to restrict their special tax status are urging supporters to sign up as unemployed and inflate already record-high jobless figures.

French Minister for Industrial Recovery Arnaud Montebourg waves goodbye after attending a ministers' meeting at the Elysee Palace in Paris May 6, 2013. REUTERS/Gonzalo Fuentes

The plan, by a spin-off of an online protest group called “The Chicks” which has 70,000 supporters, would hit President Francois Hollande in his most vulnerable spot as he battles to meet a pledge to reverse the unemployment trend by year-end.

The self-employed cannot claim unemployment benefits but they hope the threat of adding to the 3.26 million registered as jobless could scare the government into burying plans to limit their “auto-entrepreneur” tax status to two years.

“You can register online with the unemployment office. It’s easy. If it pushes up next month’s jobless figures it would be catastrophic for the government,” said Gregoire Leclercq, head of the French Auto-Entrepreneurs Federation.

Some 900,000 self-employed people, from hairdressers and language tutors to business developers, benefit on a permanent basis from reduced red tape and the right to pay social security charges as earnings come in rather than upfront.

Junior trade minister Sylvia Pinel wants to change that after complaints from construction firms that self-employed builders free of paperwork and social charges can undercut them.

A 19-year-old video games creator hatched “The Chicks” website after “The Pigeons” October Internet revolt won entrepreneurs exemptions from capital gains tax hikes.

Entrepreneurs say forcing people to register as formal businesses after two years of operation would crush start-ups just as France needs new jobs to pull it out of recession.

Confusion ensued as Prime Minister Jean-Marc Ayrault said any changes would only apply to the building sector, but junior minister Pinel said many sectors would be affected.

“We haven’t given up on the reform,” Pinel told the daily Le Parisien on Sunday. “The prime minister has asked me to continue talks based on the options I was already working on.”

Under European Union pressure to sort out France’s finances, Hollande wants to cut back exemptions in a country where roughly one household in two pays no income tax, but Pinel’s plan risks reinforcing a view the government is anti-business.

On the Chicks’ website (defensepoussins.fr) a peevish cartoon chick with sunglasses and a mohican-like quiff holds a placard reading: “Don’t kill our projects in the egg.”

As Pinel prepares to meet Leclercq and the head of a second association, the Union of Auto-Entrepreneurs, on Thursday to discuss the matter, Finance Minister Pierre Moscovici assured radio listeners that the Chicks would be listened to.

An April report by two government bodies found the auto-entrepreneur system to be broadly cost-effective and suggested it should be left alone.

Reporting by Catherine Bremer; Editing by Ruth Pitchford

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