Budget 2011: Osborne reduces corporate tax rate by 2 percent
The reduction is 1 percent more than anticpated
Chancellor George Osborne announced a 2 percent reduction – 1 percent more than anticipated – in the corporate tax rate in a bid to attract more multinationals into Britain.
The corporation tax rate, Osborne said, would be reduced by 2 percent and would continue to fall by 1 percent each of the following years to 23 percent.
“7 percent lower than Germany. ... Let it be heard … that Britain is open for business.”
“Other countries are attracting multinationals away from the UK. I want this to be a place that international companies go to, not leave” Osborne added.
“Our purpose is not to increase taxes but to simplify them. It is time we took this historic step to simplify our tax system and make it fit for the modern age,” he said.
“Stability and fiscal responsibility are not enough. Our country has to compete.
“Difficult decisions and major reforms are needed to make it happen. There’s no alternative that anyone in this House should be prepared to accept.”
Osborne said Britain must have a competitive tax system and be the best place in which to do business as well as having the most educated workforce in Europe.
Britain has “the sixth highest corporation tax rate in the world; a tax system so complex that it overtook India” in complexity.
Taxes, the chancellor said, should be “efficient and support growth” and be “simple to understand and easy to comply with”.
Osborne said he would accept some of the recommendations from the Office of Tax Simplification, set up last July and headed by John Whiting, former PwC tax partner.
“This Budget will abolish no fewer than 43 complex tax reliefs” and remove “over 100 pages from the tax code”.
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