UK to raise corporation tax in 2023 in bid to ease Covid debt
London, Mar 3 (efe-epa).- The United Kingdom’s government will raise corporation tax on large firms from 10% to 25% in 2023 as a way to repair the damage wrought on the economy by the Covid-19 pandemic.
The Conservative Party government’s Chancellor of the Exchequer Rishi Sunak outlined the economic plans in the Budget on Wednesday.
Sunak told the House of Commons that the UK’s debt would rise to 97.1% of its GDP in two years. According to the Office of Budget Responsibility, the government had to borrow 355 billion pounds during the last year of the pandemic, the highest level since World War II.
He said the UK was set to borrow 4.5% of its GDP next year.
Another part of his strategy was to freeze income tax thresholds, which determine how much tax an employee pays based on their salary, until 2026.
“These are significant decisions to have taken, decisions no Chancellor wants to make,” he said. “I recognize they might not be popular. But they are honest.”
The OBR said the decision to freeze tax brackets — which are usually adjusted in the Budget — would eventually see more workers pay more taxes over the years.
“Freezes to the income tax personal allowance and higher rate threshold for four years bring 1.3 million people into the tax system and create 1 million higher rate taxpayers by 2025-26,” it said.
The UK government is due to gradually ease its current lockdown between March and June, aided by a rapid vaccination rollout. One of the worst-hit countries in the world, the UK has registered over 123,000 Covid-related deaths overall. EFE-EPA