PARIS — In a big pre-election gamble, President Nicolas Sarkozy has promised a hike in France's consumption tax to pay for a new measure aimed to lower the high cost of labor and boost job creation.
Sarkozy has gone on national TV to say his conservative government will announce a 1.6 percent increase in the value-added tax, to 21.2 percent — and raise fees on investment income.
Sarkozy said Sunday the new tax revenues aimed to let the state take over payment of some worker benefits now paid for by employers — as a way to lower high labor costs and make French products more competitive.
Sarkozy stopped short of announcing his widely expected candidacy for the two-round presidential election in April and May. Most polls show he trails Socialist nominee Francois Hollande.