Nadhim Zahawi who is the newly appointed chancellor of the exchequer has demanded a review of the corporate tax policy, in an explicit indication that a increase of 19p to $25p scheduled for next year may be reduced or eliminated.
Zahawi was appointed the job on Tuesday night following Rishi Sunak’s resignation. Zahawi said Zahawi wanted to look into the proposed increase in corporation tax in order to ensure British firms remain competitive.
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He was quoted by Sky News on Wednesday: “I will be looking at all options. There’s no issue to be discussed. I’d like to be among the most competitive nations around the globe in terms of investment.”
I’m determined to ensure that we’re as competitive as we could be while maintaining fiscal discipline.”
Sunak declared last year as he proposed the tax on corporations increase – which was his first increase since the year 1974 the increased incentives to invest would mean that only companies that fail to invest would have to pay more taxes.
Zahawi who was a former oil industry advisor and advisor to the oil industry, is widely known as an advocate of tax cuts and, most recently, opposed an unwinding tax on oil and gas firms which operate within the North Sea. He said to Sky that his main goal is to “rebuild and grow the economy”.
In a series of interviews with TV and radio, he stressed the fact that any spending plan which include tax cuts shouldn’t distract from the necessity of limiting the amount of borrowing that is increased and reduce the rate of inflation.
“The prime minister is determined to ensure that we are fiscally disciplined. I agree with his,” he told the BBC.
He stated to Sky: “The important thing is to bring inflation under control, and to be fiscally responsible. One of the first things we have to be sure that we’re vigilant regarding, whether it’s private or public sector or private sector, to ensure that inflation does not continue to be fed by. In the present, we’re fighting the world’s biggest battle with inflation.”
In an interview with LBC Radio, he said that he was worried about the soaring costs of borrowing. The previous the year, we had it PS20bn. This is a four-fold increase in the cost of servicing debt.”
