Hammond buries Osborne’s tax-dumping plans
Britain’s post-Brexit Finance Minister, Philip Hammond, has buried a tax-dumping plan to slash the corporate tax introduced by his predecessor.
Before his resignation in July, George Osborne announced plans to reduce British corporate tax to encourage investment to under 15% from the current 20%. If that policy moved forward, Britain would have had the lowest corporation tax of any major economy.
Hammond revised the Osborne plan. The objective is now to reduce corporate tax to 17% by 2020.
Osborne’s call for a corporate tax cut was criticized by the World Trade Organization chief, Pascal Lamy, as “tax dumping.”
“If you want a proper balanced win-win relationship in the future, starting with tax competition is not the right way psychologically to prepare this negotiation,” Lamy warned in July.
The criticism was echoed by Labour’s shadow chancellor John McDonnell, who said it was “counterproductive” for Osborne to offer Britain as a European “tax haven.”