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The economic review group for the Conservative Party has suggested substantial corporate tax mitigation measures for both big and small firms should the party win the next election.
The group has proposed that the headline rate of corporation tax should fall to 25 per cent - and has also called for corporate tax to be cut for small firms to 20 per cent.
This is in reaction to an increase in tax from 19 per cent to 22 per cent for small companies, announced by Gordon Brown as Chancellor earlier this year.
The policy group has argued that Mr Browns announcement of a two per cent cut to 28 per cent, to come into effect in 2008, does not go far enough.
It emphasised that the UKs current tax planning system is damaging the countrys international competitiveness.
The report stated: "The evidence in favour of lower marginal rates of tax on income and profits is overwhelming.
"Countries with very low corporation tax rates have seen businesses grow especially quickly.
"Far from sacrificing revenue, a substantial marginal tax rate cut can, as a result of business and economic growth, lead to an increase in overall revenue after a year or so."
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