The government of new British Prime Minister Liz Truss has announced sweeping tax cuts to help stimulate economic growth amid persistent inflation and rising interest rates.
The tax cut measures include the following:
• Canceling a planned rise in corporation taxes to 25%, and instead keeping them at 19%, the lowest rate among G20 nations.
• A reduction in the basic income tax rate from 20 pence to 19 pence.
• Scrapping the 45% tax paid on incomes over £150,000 ($166,770 U.S,), taking the top rate to 40%.
• Significant cuts to taxes paid on home purchases.
• Creating a network of “investment zones” around the country where businesses will be offered tax cuts and a reduction in regulations.
• Eliminating a proposed increase to tax rates on alcohol.
The British government estimates that the tax cuts will total £45 billion by 2026-27. The measures come as a growing number of economists forecast that the United Kingdom will enter a recession by year’s end.
The British currency fell to a fresh 37-year low against the U.S. dollar below $1.107 U.S. shortly after the tax cuts were publicly announced.
