Tax Cuts Needed To Restore Confidence
The Confederation of British Industry (CBI) is calling on Chancellor Darling to cut business taxes as they are damaging the UK economy. This demand to reduce taxes is aimed at restoring confidence in the UK Government which has since deflated due to the Northern Rock fiasco and changes to capital gains taxes.
A new report by the CBI states, "A radical overhaul of the UK's corporate tax system is needed urgently if the country is to regain its status as an internationally competitive location."
The report goes on to say, "the UK has now reached a tipping point. The ever rising business tax burden and the failure of the tax system to respond to increasingly global business activity is creating a corporate tax system which is unsustainable in the long-term."
Meanwhile, the British Bankers' Association (BBA) is echoing similar concerns within the financial services industry. In its official submission to HM Treasury regarding this week's Budget report (due on 12th March), BBA members are worried about international businesses reconsidering the UK as a location of choice.
The Chief Executive of the BBA, Angela Knight, called on Chancellor Darling not to hesitate in attracting more business to the UK when considering the Budget. She warned there is strong competition from other centres and for the past quarter century the UK has been known "as a well-regulated location with a favourable tax regime for the financial services industry". However, these advantages are now being questioned. Failing to act now could hurt the economy and in particular the global banking industry outside the UK.
Mrs Knight, continues: "Taxation is not simple, and changes cause unintended consequences. Closer collaboration with the industry is essential to avoid giving our partners and competitors abroad the impression that the UK is not as friendly to business as it was just a few years ago."
Published on March 10, 2008
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