British Prime Minister Liz Truss on Monday defended the decision to cancel the tax cuts, announced three weeks ago, with the need for “stability” and a “new direction for economic growth.”
“The British people rightly want stability, so we are responding to the serious challenges we face from worsening economic conditions.”he said, through the social network Twitter.
Truss said the steps taken are intended to “carry out a new course of growth that supports and reaches out to people across the UK”.
The head of government thus commented on the announcement made today by the Treasury Minister, Jeremy Hunt, to cancel practically all of the tax cuts promised by Truss during the campaign to succeed Boris Johnson.
In an announcement this morning, Hunt, who was only appointed on Friday to replace Kwasi Kwarteng, canceled the 20% to 19% tax break for the lowest tax bracket. [equivalente ao IRS]VAT exemption for tourists, tax freeze on alcoholic beverages and tax reforms for the self-employed and dividends.
The Executive had already been forced to backtrack on other promised cuts in the “Growth Plan” presented on September 23, due to the instability in the financial markets created by the impact on public accounts.
Thus, corporate tax [equivalente ao IRC] after all, it will increase from 19% to 25% in 2023 and the maximum income tax bracket of 45% [equivalente ao IRS] it will continue for the wealthiest taxpayers rather than be abolished.
“We are going to reverse almost all the fiscal measures announced in the growth plan three weeks ago that have not yet been legislated in parliament,” admitted Hunt, in an attempt to control the increase in public debt.
“At a time when the markets rightly demand a commitment to sustainable public finances, it is not right to ask [dinheiro] borrowed to finance this tax cut,” he justified.
Hunt added that the plan to freeze domestic energy prices through 2024 will only be guaranteed for six months, through April 2023, until “a new approach is found that costs the taxpayer significantly less than anticipated, while ensuring enough support for those who need it. .
The initial plan presented on September 23 in Parliament maintains the reduction of the Social Security contribution and a discount in the tax on the purchase of housing. [stamp duty] because these have already begun to be legislated.
In total, Hunt anticipated that the cancellation of the tax cuts will raise an additional 32,000 million pounds (37,000 million euros) a year in tax revenue.
Source: TSF
