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The CBI is worried by government plans on taxes and pensions
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CBI cautions government on taxes and pensions
The Confederation of British Industry has announced its opposition to rumoured government plans to target corporation tax and pension rules when the Chancellor of the Exchequer, Gordon Brown, unveils his first Budget next month.
Adair Turner, the director-general of the CBI, said cuts in relief on advance corporation tax (ACT) and business contributions should not be used as instruments to keep economic growth under control. "Significant harm could result if changes in the corporation tax and pensions taxation regimes were introduced simply as easy ways to raise revenue," Mr Turner said.
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City sources predict Brown could increase taxes
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Sources in the City predict that Mr Brown will introduce tax increases or cuts in tax relief to offset inflationary pressures.
Removal of ACT relief, Mr Turner argued, would cut pension fund income, leading to a reduction in the income of future pensioners. He added that it would increase the total tax revenue from business profit, thus cutting the amount of money available for investment.
While Mr Turner said that the CBI supported government plans to undertake a review of personal pensions, he urged the new administration not to introduce major change "precipitately".
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