London, July 4 (IANS) The British government is to consider slashing corporation tax to less than 15 per cent in an attempt to maintain business interest in the country, amid a turbulent economy in the wake of the “Brexit” — Britain’s vote to leave the European Union.
In statements published in the British daily “Financial Times”, Chancellor of the Exchequer George Osborne said the measure, which would see the country offer some of the lowest corporation tax rates worldwide, is a clear message that Britain is “open for business”.
Although he did not indicate when the tax cut — currently at 20 per cent — would come into force, the plan is seen as a gesture to maintain Britain as a business-friendly location and avoid a possible drain of capital in the wake of the “Brexit” vote in the EU referendum on June 23, the Efe news cited the report.
Such a cut in corporation tax would put Britain rates closer to those of the Republic of Ireland (12.5 per cent), and much lower than the United States (39 per cent) and Germany (30 per cent).
Osborne said part of his plan is to attract Chinese investment into the country, and boost investment in northern England, a region with high unemployment and where the “Brexit” vote received strong support.
The chancellor said Britain faced a “very challenging time” and urged the Bank of England to use its powers to avoid “a contraction of credit in the economy”.
His plan contrasts with the warnings he issued days before the referendum in which he suggested that a “Brexit” win could see the necessary introduction of an emergency budget with higher taxes and higher spending to tackle the “shock” that the county’s economy could face.
Although the London Stock Exchange slumped upon the announcement of the “leave” victory, it has recovered in recent days.
However, the pound continued its downward trend on Monday, falling 0.10 per cent against the US dollar to 1.236 dollars, and was down 0.04 per cent against the euro to 1.191 euros.
Opposition spokesman for the economy, John McDonnell, said that Osborne’s plan would make Britain a tax haven.