Rishi Sunak may have to break income tax promise says expert
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The US President is pushing for a 21 percent rate as part of a plan to crackdown on tax avoidance by multinational companies such as Amazon. One Biden administration official said the plan was an “important moment to demonstrate that the United States and democracies can deliver for the people”.
However, MPs and Chancellor Rishi Sunak have said they will not “rush to sign” the proposed plans.
Mr Sunak previously said the 21 percent for business tax was “higher than where previous discussions were” but said he was open to discussions.
Despite Mr Biden’s proposal being backed by France, Italy and Germany, an expert has warned the only beneficiaries of the plans would be China and Russia.
Author and emeritus professor of sociology at the University of Kent, Frank Furedi told Express.co.uk: “I think there are benefits for the US but not other countries.
“There are benefits for the Biden administration but not for Europe or those countries such as Hungary, Ireland and Singapore with low tax rates.
“They are entirely dependent on attracting foreign capital and this would undercut them.
“If the Biden proposals are accepted, the main beneficiaries would be China and Russia, who wouldn’t go along with this but will continue to have low corporation tax rates.”
Mr Furedi went on to say how the proposed corporation tax would create “particular problems” for a Brexit Britain and accused Mr Biden of encroaching “upon policymaking”.
He continued: “I think it will create particular problems for the UK because Biden is trying to encroach upon policymaking.
“I think that one of the impulses behind Brexit was to take back control of our taxation policies, another crucially important economic matter.
“We have to remember the necessity for a sovereign nation to have control on their taxation policy is really important and we should not give that up after Brexit.”
But Mr Furedi also claimed Mr Biden is only interested in taxing big digital companies because he wants American companies “to be as competitive as possible”.
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He continued: “I think what [Rishi] Sunak is interested much more is a common taxation corporation tax but what Suank is interested in is getting an international agreement on how much the digital companies should be taxed and how can we tax these big digital companies here in Britain?
“But Biden is not interested in what Sunak is interested in, taxing these big digital companies, because he wants American companies to be as competitive as possible.
“He doesn’t much care about our priorities.
“I think what he is really doing is pushing forward an economic policy that the whole world subsidies his economic program.”
A Treasury spokesperson said reaching an “international agreement” was a priority for Mr Sunak but warned any agreement must ensure digital businesses pay tax in the UK.
They said: “Reaching an international agreement on how large digital companies are taxed is a priority for the Chancellor.
“However, it also matters where the tax is paid and any agreement must ensure digital businesses pay tax in the UK that reflects their economic activities.
“We welcome the US’ renewed commitment to tackling the issue and agree that minimum taxes might help to ensure businesses pay tax.
“However, it also matters where the tax is paid and any agreement must ensure digital businesses pay tax in the UK that reflects their economic activities.”
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