Brexit: Is Cutting Corporation Tax the Right Way to Go?
July 15, 2016
Now we have a new Chancellor, it's unclear whether recently announced plans to cut corporation tax further will continue. Does this matter? Certainly the headline rate of tax sends a powerful message internationally. Businesses tell us that tax is an important consideration as they weigh up where to expand, invest, move jobs etc - but it's not the only one.
I'd like to see a package of measures, not just to attract foreign firms, but to help re-balance the economy more broadly. For Brexit undoubtedly provides the impetus and opportunity to take a fresh look at the tax system. There will be more freedom to use tax to help different people, regions and industries. It's time to think holistically about how tax reliefs and incentives should be channelled. Is it about spreading support across a number of sectors and regions, or should we be selective? If the latter, which regions do we help most, and which industries? How do you choose, when everyone will be clamouring for attention?
Now is the time for that debate. We need different perspectives, analysis, forecasts on which brave decisions can be based. Don't underestimate the key role tax can play in shaping our economic destiny.
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