France to postpone contested new truck tax by six months

PARIS - The French government plans to defer by six months the introduction of a new levy on heavy trucks at the heart of a gradually spreading anti-tax revolt, Le Monde newspaper reported on Saturday.

President Francois Hollande's government is struggling to rein in the public deficit, but it has had to suspend the January 1 application of the tax, without bowing to protesters' demands for it to be scrapped altogether.

Voicing concerns about the government's ability to cut the deficit in the face of violent protests, Standard & Poor's cut France's credit rating on Friday to AA from AA+.

Le Monde reported that the government intended to wait to apply the tax, which is supposed to bring in more than one billion euros (£830.2 million) per year, until July after municipal and EU elections in March and May, in which Hollande's Socialists risk big losses.

An official with Prime Minister Jean-Marc Ayrault's office would not confirm the report, but said the tax had not been entirely scrapped.

Increasingly under pressure over France's high fiscal burden, the government already dropped a planned change in corporate tax unpopular with business and has ditched new charges on special savings products.

In recent weeks, the government has faced the most violent anti-tax protests since it came to power in May 2012 over the so-called ecotax on heavy goods traffic, with protesters destroying dozens of sensor-based toll-gates over major roads.

The revolt started in the western region of Brittany, where protesters fear the ecotax will be a further burden on business.

The government aims to negotiate a plan in the coming months to support the economy of Brittany, where the livestock and meat production sector, which are major employers in the region, has been hit hard by a series of closures.

The protests have been spreading elsewhere with two toll gates destroyed on Saturday in south-western France while truck drivers held go-slow operations on motorways near Marseilles in the south, Lyon in the east and in northern France.

The revolt also spread for the first time to the Paris region with protesters hanging an anti-Hollande banner on a toll-gate on a motorway encircling the capital.