22 Aug 2014

New Caledonia opts for tax reform

2:46 pm on 22 August 2014

There is broad agreement in New Caledonia to reform the tax system as part of efforts to revive the economy.

A deal was struck at a meeting attended by most political parties as well as employers and unions which has drawn up 50 measures to be formalised in Congress by the end of the year.

The roadmap for the next four years provides for a consumption tax to be introduced in 2016 to replace several other taxes.

It was also agreed to set up a fund for future generations by collecting a levy on mining.

The economy grew at 3.4 percent for the decade until 2011 but has lost momentum.

While 17 percent of households are now in poverty, prices are about a third higher than in mainland France.

An employers' representative says after years of indecision there is no choice but to make changes.

The Noumea conference that agreed on the measures was boycotted by the pro-independence Caledonian Union and two unions.