CBI Warns Against Damaging Consequences Of Further UK Tax Hikes

by Jason Gorringe, Tax-News.com, London

04 March 2004

As budget time approaches, the Confederation of British Industry has called on the government to help business and investment growth by cutting taxes, warning that further taxes rises will do “immense damage” to the UK economy.

In its budget submission, the CBI has proposed a simple across-the-board tax cut encompassing either a reduction in employers’ National Insurance contributions or corporate income tax, with the CBI’s preferred option being a cut in NI, a tax the confederation says penalises job creation.

"The government has gone some way to promoting enterprise in the UK but it should sit up and take notice when top business decision makers start saying the UK is declining as an investment location,” commented CBI director-general Digby Jones.

The CBI also said it wants an assurance from the government that it will not increase the myriad of other taxes that businesses face, including local rates, environmental levies and transport taxes such as fuel and air passenger duty.

"In recent weeks there have been encouraging signs that the Treasury is getting our message. Now we need a real commitment to a simplified and low-tax business environment with a plan to roll back the business burden over the medium term,” urged Jones.

"The government can look forward to some better economic news this year, but it is going to need it because public finances are under real pressure and there is little sign of public sector productivity improvement. It is absolutely crucial that the Chancellor does nothing that could throw the recovery off course," he concluded.

The full text of the CBI Budget Submission 2004 can be found in the Tax News Resources section.

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