"No tax merits putting the unity of the nation in danger," Philippe said in a televised address, adding that the anger on the streets "originates from a profound injustice: of not being able to live with dignity from one's work".
He also announced that increases in the cost of gas and electricity, also set to take effect from January 1, would be suspended for three months during the winter months.
Philippe added that a tightening of the technical assessment for cars, which was set to penalise heavily polluting older vehicles, would also be suspended for six months.
The measures are an attempt to take the heat out of anti-government protests by low-income people in small-town and rural France who have blocked roads and demonstrated for more than a fortnight.
"If taxes fall, public spending must fall," he said.
He repeated his earlier condemnation of the violence in Paris at the weekend and thanked France's stretched security forces.
"If there is another day of protests, it must be declared in advance and must take place calmly," he said.
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