Responding to reports that the Chancellor Rishi Sunak is considering raising corporation tax, Mark Littlewood, Director General at free market think tank the Institute of Economic Affairs, said:

“After spending billions supporting businesses over the course of the pandemic, punishing them now with a tax hike would be illogical and counterproductive. Corporation tax is one of the most inefficient ways of raising government revenue and amounts to a tax on wages, consumers and investment.

“The UK economy is already at or close to its maximum taxable capacity. A hike in corporation tax would slow down economic growth and may even reduce revenue for the Treasury. The government should instead focus on boosting economic growth by relaxing regulation and reducing the tax burden on businesses. This will be the way to begin to balance the books.”

ENDS

Notes to editors

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To read IEA report, ‘Why Corporation Tax should be scrapped’, click here.

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