‘Beneficial for everybody’ Rees-Mogg stands firm on corporation tax
GB News: Rees-Mogg stands firm on corporation tax cuts
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Jacob Rees-Mogg has continued to back the Chancellor’s mini-budget plan to deliver a slew of tax cuts in order to promote economic growth. Despite a swift U-turn on Conservative plans to cut the top rate of income tax, the Tory Government under Liz Truss appears to be standing firm on other tax-cut pledges. The Business Secretary claimed the scheme to scrap a scheduled increase in corporation tax from 19 percent to 25 percent was a decision that would be “beneficial for everybody”.
Speaking to GB News, Mr Rees-Mogg asserted: “Not having the rise is extremely good policy.”
He continued: “Cutting corporation tax from 28 percent down to 19 percent led to about a 50 percent increase in corporation tax revenues and an increase in corporation tax as a percentage of GDP.
“It actually provided more money to HMRC to pay for the public services we need.
“It’s a policy that is beneficial for everybody – it’s better for businesses and it’s better for the Treasury.”
The planned cut to corporation tax will accompany a string of further tax cuts outlined in Kwasi Kwarteng’s mini-budget.
The previously implemented hike to national insurance rates will be ditched under the new Prime Minister and the basic rate of income tax will also fall from 20 percent to 19 percent.
In an unexpected move, the Chancellor has also announced the cap on bankers’ bonuses will be lifted.
A large part of the economic package covers a huge £60 billion energy package which will ensure the majority of households pay no more than £2,500 for their annual energy bills under the threat of rising fuel costs.
Mr Rees-Mogg used the historical impact of previous corporation tax cuts to evidence his claim that the policy would be an “extremely good” move.
In 2017, the rate of corporation tax was slashed 19 percent. This rate is significantly lower than the rest of the G7 nations and places the UK at the lowest rate of corporation tax in the G20.
The former Chancellor, Rishi Sunak, had outlined plans to increase corporation tax to 25 percent, marking the first increase in the rate since 1974.
The Government under Liz Truss has claimed that maintaining a low rate of corporation tax is essential if the UK hopes to hold a strong position in the competitive global market.
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In wake of the initial backlash to Kwasi Kwarteng’s drastic economic plan, the Government was forced to announce that the proposal to scrap the top 45 percent rate of income tax for the highest earners would not go ahead.
There had been speculation that this u-turn, which came as a turbulent start to the Conservative Party conference in Birmingham, could lead to others.
Prime Minister Liz Truss has pledged the remaining tax cuts will be delivered in hopes of calming the current state of economic turmoil in the UK.
During Prime Minister’s Questions, Ms Truss told the Commons the tax cuts would not result in huge cuts to public spending and that her Government would focus on how to “spend public money well,” to ensure crucial services remain funded as her plan is rolled out.
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