One of the issues the incoming Brown government may face soon is tax reform. According to Reuters:
The Confederation of British Industry has pulled together a "Tax Task Force" of leaders from major firms such as ICI, Pfizer, Cadbury Schweppes and Barclays and tax experts to come up with new ideas to reform the current system.
Chancellor Gordon Brown announced a cut in the corporation tax rate to 28 percent from 30 percent from next year in his March Budget, taking it below that of other big economies such as the U.S., Germany, France and Japan.
That, says CBI Director General Richard Lambert, was a step in the right direction, but deeper reform is needed to make the tax system competitive in the long term, especially as firms now have more choice over where they are based and pay tax. A survey by the business group last year showed that one in five UK firms had relocated some of its activities overseas because of gripes over tax.
Before that report, though, we will see the Mirrlees Review report published in January 2008: Reforming the Tax System for the 21st Century. Timed to coincide with the 30th anniversary of the Meade report on taxation, it will cover not only business but almost all forms of taxation. It promises to be a substantial work, with some fo the world's leading public finance experts involved. For those who can't wait until next year, a sneak preview of much of the draft report can be found here.
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