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• Cutting Corporate Tax Will Boost UK Revenues, Report Argues

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  Bob Juchter van Bergen Quast    Group moderator

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  Cutting Corporate Tax Will Boost UK Revenues, Report Argues

  by Robert Lee, Tax-News.com, London
  
  A cut in the UK's rate of corporation tax could not only give the struggling economy a much-needed boost, but also lead to an increase in the Treasury's tax take, according to a new report.
  
  With large corporations such as Shire Pharmaceuticals and Krom River leaving Britain due to high tax rates, and shortfalls in public finances growing swiftly, the research, written for Conservative Way Forward (CWF) by Matthew Elliott, Matthew Sinclair and Corin Taylor of the TaxPayers' Alliance (TPA), claims to be the most wide-ranging, comprehensive and up-to-date report on the issue of corporation tax.
  
  By studying the economic records of 23 other high income developed countries, TPA researchers identified evidence showing that reducing corporation tax rates has a positive effect on a country's competitive standing, and that cutting corporation tax by 10% would result in the rate of growth in revenue raised by corporation tax increasing by 5%.
  
  "A cut in corporation tax would encourage companies struggling under the burden of high taxes to stay in Britain, and attract new investment which would drive up the amount raised in tax over time," observed Matthew Elliott, Chief Executive of the TaxPayers’ Alliance.
  
  "Many British politicians look enviously at Ireland’s incredible economic record over the last ten years but worry that we can’t afford to replicate the corporate tax cuts that produced their success. Our research shows that such fears are unfounded, that corporate tax cuts deliver such a big boost to investment and economic growth that tax revenues rise," he added.
  
  Despite a 2% cut this year, at 28% the UK’s corporate tax rate remains higher than the global average, which, according to KPMG dropped 0.9% to 25.9% from last year’s 26.8%. The EU average rate also fell, 1% year on year, to 23.2%.
  
  • 22 Sep 2008, 8:45 pm
  Bob Juchter van Bergen Quast wrote: > by Robert Lee, Tax-News.com, London > > A cut in the UK's rate of corporation tax could not only give the > struggling economy a much-needed boost, but also lead to an increase > in the Treasury's tax take, according to a new report. > > With large corporations such as Shire Pharmaceuticals and Krom River > leaving Britain due to high tax rates, and shortfalls in public > finances growing swiftly, the research, written for Conservative Way > Forward (CWF) by Matthew Elliott, Matthew Sinclair and Corin Taylor > of the TaxPayers' Alliance (TPA), claims to be the most wide-ranging, > comprehensive and up-to-date report on the issue of corporation tax. > > By studying the economic records of 23 other high income developed > countries, TPA researchers identified evidence showing that reducing > corporation tax rates has a positive effect on a country's > competitive standing, and that cutting corporation tax by 10% would > result in the rate of growth in revenue raised by corporation tax > increasing by 5%. > > "A cut in corporation tax would encourage companies struggling under > the burden of high taxes to stay in Britain, and attract new > investment which would drive up the amount raised in tax over time," > observed Matthew Elliott, Chief Executive of the TaxPayers’ Alliance. > > "Many British politicians look enviously at Ireland’s incredible > economic record over the last ten years but worry that we can’t > afford to replicate the corporate tax cuts that produced their > success. Our research shows that such fears are unfounded, that > corporate tax cuts deliver such a big boost to investment and > economic growth that tax revenues rise," he added. > > Despite a 2% cut this year, at 28% the UK’s corporate tax rate > remains higher than the global average, which, according to KPMG > dropped 0.9% to 25.9% from last year’s 26.8%. The EU average rate > also fell, 1% year on year, to 23.2%.