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France reportedly scrapping planned tax hike on hotel stays

France is expected to scrap a planned hike in the tax levied on hotel stays after an outcry by the tourist industry, the Journal de Dimanche newspaper reported Sunday.

PARIS: France is expected to scrap a planned hike in the tax levied on hotel stays after an outcry by the tourist industry, the Journal de Dimanche newspaper reported Sunday.

The draft law proposed by the lower house of parliament -- which would have seen a five-fold increase in the tax -- will be struck down by the Senate, the newspaper said without giving a source for the information.

The report follows criticism from Prime Minister Manuel Valls, who told RTL radio on Saturday that the proposed tax increase was "much too high".

Hoteliers and tourist chiefs have been up in arms over the measure, which would have seen the hotel tax go from a current 1.50 euros ($2) to up to eight euros -- and 10 euros in Paris. They said it would deal a blow to the tourist industry in France, which is the most visited country in the world.

Other members of the government, including Foreign Minister Laurent Fabius and Economy Minister Arnaud Montebourg also criticised the proposed measure, which was put forward in parliament last Wednesday by the ruling Socialist Party.

France has increased several taxes under President Francois Hollande in a bid to reduce its high public debt, amid anaemic growth and climbing unemployment.

The country attracts 83 million tourists a year. The tourism sector accounts for seven percent of gross domestic product, with annual spending by foreign tourists amounting to 36 billion euros ($49 billion).

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