On the 7th of last month, when the UK entered a third blockade due to Corona 19, a suspension notice was posted at a bar in Soho, London. London = AP Yonhap News
The British gave out a’corona bill’ to the public as announced. The company formulated a policy of raising the corporate tax rate from the current 19% to a maximum of 25% in 2023, filling empty warehouses with tax in the aftermath of the spread of infectious diseases. As countries around the world have released astronomical money last year, the move to resolve the insolvent national finances with the’increased tax’ starting with the British corporate tax hike is expected to accelerate further.
According to BBC Broadcasting on the 3rd (local time), British Finance Minister Rishi Sunak reported to the House of Commons on the same day a budget proposal containing additional support plans for the novel coronavirus infection (Corona 19). The key is to raise the corporate tax rate paid by companies with net income of more than £250,000 (399 million won) to 25% after April 2023. We maintain the current tax rate of 19% for companies with a net profit of £50,000 (KRW 74 million) or less. Minister Soo Nak explained that “the company that receives the highest corporate tax rate of 25% will be 10% of the total.”
The UK’s corporate tax rate increase has been 47 years since 1974. Instead, the government also proposed a’super deduction plan’ that deducts 130% of the cost of new corporate investments to appease the business community. Income tax is a plan to increase the amount of taxable and taxable by not adjusting duty-free shops until 2026. This way, income tax will be collected from more than 1 million people without affecting the tax rate.
British Finance Minister Rishi Sunak leaves the London Downing 11th Street Finance Minister’s residence to explain the budget to Parliament on the 3rd, holding a briefcase with the budget to reporters. London = AFP Yonhap News
The British government’s start to increase is because debt has risen to unbearable levels as the government made drastic fiscal expenditures to defend against the Corona 19 recession last year. Government borrowing for fiscal year 2020-2021 was £355 billion (557 trillion won), 17% of gross domestic product (GDP), the highest after World War II. The ratio of national debt to GDP in the UK from 85.4% in 2019 is expected to soar to 111.5% this year. “The government has spent more than £100 billion (156 trillion won) on companies for the purpose of supporting the pandemic,” said Minister Soo Nak.
The fact that the UK maintains the lowest corporate tax among developed countries also eased the burden of tax increases. Even if the corporate tax rate is raised, the UK is the lowest among seven major countries (G7), and the fifth lowest among members of the 20 major countries (G20), the government explained. As of last year, the average corporate tax rate of the G7 was 27.3%. In the United States, President Joe Biden has professed to raise the corporate tax rate, which is currently 21%, to 28%.
On that day, the British Budget Office (OBR) saw that its economy would recover to its pre-Corona 19 level in the summer of 2022. Growth rates this year and next year are projected to be 4% and 7%, respectively.
Heo Gyeongju reporter [email protected]
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