UK Chancellor of the Exchequer (Treasury Secretary) Alistair Darling is expected to reduce British sales tax or VAT from 17.5% to 15% in a move aimed at stimulating the faltering Uk economy.
UK Prime Minister Gordon Brown will try to kickstart the British economy today by spending billions of borrowed dollars on tax cuts in a bid to stop the recession evolving into a depression.
It is also reported that the UK will exempt
It is expected that the moves will be funded by borrowing along with a rise in income tax for high earners. This will be the firsdt income tax rise in the Uk in 33 years.
“Extraordinary times require extraordinary action,” Mr Brown told a business conference this morning.
Britain is sliding into deep recession with house prices slumping, unemployment rising and manufacturing output shrinking.
As well as radically increasing his borrowing numbers, Mr Darling will have to slash his economic activity forecasts. Respected economic forecasters, the National Institute of Social and Economic Research, said today Britain’s economy would shrink by 1.5 percent next year and is not expected to start recovering until early 2010.dividends to foreign companies from corporate taxes.
Internationally, Ireland will see the biggest impact from the changes as it will see the incentive for companies to tax domicile in ireland removed and will also see the price differential widen between Ireland and the Uk for goods and services which will seriously impact trade on the southern side of the UK border with Ireland.