How George Osborne can stimulate the UK economy
07 February 2012
Matthew Gilleard - ITR
A UK think-tank has urged the coalition government to halve the corporate tax rate, arguing it is the “only source of a viable economic recovery”, but the report overlooks other vital areas of the tax code such as reform of the controlled foreign company (CFC) regime.
The study from the Centre for Policy Studies (CPS) urges the government to halve the corporate tax rate, and, more immediately, to reduce the rate to 20% in the next month’s budget. The CPS claims such a cut would be a “quantum leap towards encouraging the enterprise economy which this country needs”, as well as a “wake-up call to business”.
The report highlights the fact that the corporate tax rate has been halved since it stood at 52% in 1982, and that this halving has been accompanied by an increase in the revenue the tax has generated.
The rate now stands at 26%, and will move to 24% in 2013 and 23% from April 2014
“In 1982-83, it yielded revenues equivalent to 2% of GDP. In this financial year, the Treasury expects corporation tax to yield 2.8% of GDP (or £43.2 billion ($68 billion)),” said former tax lawyer David...
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