FRANCE'S Constitutional Council has rejected a 75% upper income-tax rate to be introduced in 2013.

The Council ruled that the planned 75% tax on annual income above one million euros was unfair in the way it would be applied to different households.

The move is a setback for Socialist President Francois Hollande's push to make the rich contribute more to cutting the public deficit.

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Prime Minister Jean-Marc Ayrault said the government would redraft the tax-rate proposal to answer the Council's concerns, and resubmit it in a new budget law.