CBI Calls For Abolition Of Stamp Duty On Share Transactions

by Jason Gorringe, Tax-News.com, London

04 March 2002

The Director-General of the Confederation of British Industry (CBI) called last week for UK Chancellor Gordon Brown to abolish stamp duty on share sale transactions, arguing that the tax puts companies in the United Kingdom at a competitive disadvantage.

Speaking at the Finance and Leasing Association's annual dinner, Digby Jones revealed the extent of the problems faced by British businesses:

'Today's tax revenue on share transactions is almost three times as much as it was only five years ago,' he explained. 'In 1996/7 the Chancellor raised £1.4 billion from share sales and by 2000 it had risen to almost four billion.'

The call for the reduction or removal of tax on share transactions is not a new one, and every year the financial and business sector are disappointed as the Government once again fails to address the issue. However, the CBI chief pointed out last week, the existence of the tax now poses a 'serious threat to London's position as a global champion.'

'Stamp duty on share sales is either lower or non-existent in all of our major competitor countries around the world,' he complained. 'While UK firms have to pay duty at 0.5%, there is no charge at all for businesses in Germany and Japan, and the UK tax is 150 times that of the United States.'

However, Mr Jones conceded that revenue from the stamp duty on share transactions represents a significant contribution to the Government's income, and explained that the CBI was not looking for an immediate abolition of the tax:

'The Chancellor should eliminate or at least reduce this tax over the medium term,' he suggested.

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