UK businesses will soon have to pay more tax. British Prime Minister Liz Truss announced this on Friday. This is the second time in a short time that the newly appointed prime minister has had to adjust her tax plans. The heavily criticized plan has cost Finance Minister Kwasi Kwarting the president.
Truss announced Friday that corporate tax will be increased from 19 to 25 percent. The previous government had already decided on this, but the prime minister who took office in September initially dismissed this plan off the table. By keeping taxes low, companies will have greater opportunities to invest and thus preserve the economy, she said. So she’s back to that now.
Last week, she also had to undo another procedure reluctantly. Truss and Quarting wanted to cut taxes on the richest Britons from 45 percent to 40 percent. Then the richest Britons will spend more, which will carry over to other walks of life. Many questioned the feasibility of this plan, after which the Prime Minister canceled the tax cuts.
Both measures were part of a larger tax plan to keep the economy going, which was introduced in September. The plan was criticized even by members of Truss’ own party.
It has also led to turmoil in financial markets, in part due to a lack of clarity on what the plans mean for the British treasury. The Bank of England regulator had to intervene several times to restore stability to the markets.
The tax plan came from the mind of Kwarteng, who also took office in September. Due to heavy criticism of the plan, the minister was sacked after 38 days on Friday.
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