UK announces swathe of tax cuts to stimulate economy
London, Sep 23 (EFE).- The United Kingdom’s new chancellor announced a swathe of tax cuts Friday in a bid to stimulate the economy as inflation bites and the gloomy outlook of a recession looms.
“Our aim, over the medium term, is to reach a trend rate of growth of 2.5%,” Kwasi Kwarteng said in a statement.
“And our plan is to expand the supply side of the economy through tax incentives and reform,” the conservative chancellor added.
The Growth Plan will slash the basic rate of income tax to 19% in April 2023, a tax cut over 31 million people will benefit from in the short term, he said.
“This will simplify the tax system and make Britain more competitive,” Kwarteng said.
The fresh mini-budget will also increase the stamp duty threshold — the tax first-time property buyers pay when purchasing a home — from £300,000 to £425,000.
“The steps we’ve taken today mean 200,000 more people will be taken out of paying stamp duty altogether.”
Kwarteng also announced a corporate tax hike issued by the previous chancellor had been axed and the cap on banker bonuses eliminated.
Following the 2008 financial crisis, a cap on bonuses across the European Union was issued, but the chancellor said: “all the bonus cap did was to push up the basic salaries of bankers, or drive activity outside Europe.”
“A strong UK economy has always depended on a strong financial services sector. We need global banks to create jobs here, invest here, and pay taxes here in London, not Paris, not Frankfurt, not New York,” he added.
He also reiterated that the recent hike in national insurance payments, issued by the former chancellor Rishi Sunak, would be canceled.
“We promised a new approach for a new era,” Kwarteng said.
“And we are securing our place in a fiercely competitive global economy with lower rates of corporation tax and lower rates of personal tax.
“We promised to prioritize growth,” the chancellor concluded.EFE