Britain's new coalition government will commit to lower and simpler corporate taxes in order to help the private sector lead economic growth, chancellor of the exchequer George Osborne said tonight.
In his first major speech since taking office last week, Mr Osborne told the Confederation of British Industry that corporate tax reform was a priority for the government and that he would produce a five year plan in his first budget next month.
"I can confirm that the final coalition agreement that we will publish tomorrow will commit us to lower and simpler corporate tax rates," he said.
"Let me give you advance notice of what it will say -- 'We will reform the corporate tax system by simplifying reliefs and allowances, and tackling avoidance, in order to reduce headline rates'."
Mr Osborne's Conservative Party had pledged to cut corporation tax to 25 per cent from 28 per cent but it has been unclear whether this promise would survive talks with coalition partners the Liberal Democrats who were concerned the move would come at the cost of other financial support for business.
The speech did not make clear, however, whether Mr Osborne would go ahead with any cut in his first emergency budget on June 22nd or whether the pledge would be a relegated to a long-term commitment.
Mr Osborne said he would also like to reform the complex Controlled Foreign Companies rules.
"I want multinationals coming to the UK, not leaving. I am under no illusions. Achieving all this will be hard and it won't happen overnight," he said.
He also confirmed that he would announce a "substantial increase" in the personal income tax allowance in the budget with a long-term goal to raise it to £10,000, a Liberal Democrat election pledge.
Reuters