Published On: Tue, Jul 5th, 2016

EU says British tax-cut plan not a good idea

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Britain's finance minister George Osborne said at the weekend he would seek to slash corporation tax to under 15% over fears of a corporate exodus following the June 23 referendum to leave the EU  © AFP/File Odd Andersen

Britain’s finance minister George Osborne said at the weekend he would seek to slash corporation tax to under 15% over fears of a corporate exodus following the June 23 referendum to leave the EU
© AFP/File Odd Andersen

Paris (AFP) – The European Union’s top economic official on Tuesday criticised a British proposal to slash corporate tax to less than 15 percent following the nation’s vote to abandon the bloc.

Britain’s finance minister George Osborne said at the weekend he would seek to slash corporation tax to under 15 percent over fears of a corporate exodus following the June 23 referendum to leave the European Union.

The 28-nation EU gave a frosty reception to the plan, however, saying it would raise the threat of a competitive series of corporate tax cuts as countries try to lure firms to their shores.

“Going to 15 percent does not seem to me to be a good initiative,” the EU’s economic affairs commissioner, Pierre Moscovici, told French radio station Radio Classique.

“We should not enter into exacerbated fiscal competition between ourselves, or fiscal dumping,” Moscovici said in the first public reaction by the bloc to Osborne’s proposal.

EU Commissioner of Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici, speaks during a meeting in Luxembourg, on June 16, 2016  © AFP/File John Thys

EU Commissioner of Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici, speaks during a meeting in Luxembourg, on June 16, 2016
© AFP/File John Thys

The British finance minister revealed his plan in an interview with the Financial Times published on Sunday evening. The Treasury confirmed the comments to AFP.

Prior to the Brexit vote, British tax rates on corporate profits were already set to be cut from 20 percent to 19 next year and to 17 percent in 2020.

But the new target, which has no timetable, would give Britain the lowest rates of any major economy, and put it closer to the 12.5 percent rate in EU member Ireland.

“We must focus on the horizon and the journey ahead and make the most of the hand we’ve been dealt,” Osborne told the Financial Times.

About the Author

Syed Ammar Alavi

- is Lahore (Pakistan) based journalist & writer with 25-year experience in print, wire and broadcast forms of journalism. His major fields of interest are politics, film,tv,sports, climate change and technology

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