French Prime Minister Dominique de Villepin told the French parliament on Wednesday that France would gain an "overall agreement" on VAT (sales tax) cut for restaurants and the building sector in the European Union.

"The (French) government wants to get an overall agreement on reduced rates of VAT because it is for us about creating jobs and defending the purchasing power of French people," said Villepin.

President Jacques Chirac promised to lower sales taxes for restaurants in 2002 and France has been seeking to persuade EU partners of its plan to reduce the rate of VAT on eating out to 5. 5 percent from the current 19.6 percent.

"A commitment was taken by the president of the Republic by my predecessor (former Prime Minister Jean-Pierre Raffarin) and I will fight to ensure it is honored," said Villepin.

Thousands of French restauranteurs staged a protest in Paris last month to press the French government to get an agreement on VAT cut.

According to one of the organizers of the protest, the UMIH hospitality federation, a reduction in the VAT rate could create as many as 40,000 jobs in France.

EU finance ministers, who met in Brussels on Tuesday to discuss the harmonization of sales tax across the 25-state bloc, failed to agree on a list of services to benefit from an exceptionally low sales tax. The issue of VAT tax harmonization is to be discussed by European heads of state during the next summit to be held on Dec. 15-16.

Source: Xinhua