UK Needs Flat Rate Taxes
May 21, 2012 Taxation in UK
LONDON – The UK needs to overhaul it tax system and replace all of the current income taxes with a 30 percent flat rate tax, according to a group of UK tax experts.
On May 21st the 2020 Tax Commission released a report outlining a series of proposed changes to the UK tax system, aimed at simplifying taxation in the country and boosting economic growth in the future.
One of the key proposals brought up by the Commission was too instate a 30 percent flat rate of tax on all personal incomes and capital earnings, and to introduce a GBP 10 000 tax free allowance. According to the report, the overhaul to the tax system would lead to reduced tax liabilities for most taxpayers, and would spur higher levels of consumer spending and consumption in the UK, turning the country into a “global trading hub”. The Commission estimates that the revised tax rate would directly lead to a 8.4 percent increase to the country’s GDP within 15 years of the measure being implemented.
Commenting on the proposal, the chairman of the Commission Allister Heath said that it is time for the UK to choose between “…tweaking the status quo and letting our economy continue to be crippled by complex and punitive taxes, and drastically changing course with a radical but realistic plan for a tax system fit for the 21st century.”
Under the Commission’s proposal, corporate taxes would also be replaced by a 30 percent tax on all dividends, interest and rent. The report also recommends scrapping inheritance taxes, capital gains taxes, stamp taxes, air passenger duties, and also reducing fuels duties to 5 percent.
The 2020 Tax Commission is comprised of 30 political, economic and tax experts, and was established by the TaxPayers’ Alliance and Institute of Directors.
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