British finance minister Rishi Sunak is set to increase a tax on business to pay for an extension to Covid-19 support schemes in the budget next month, The Sunday Times reported.
Sunak, in his speech on March 3, will announce he is increasing corporation tax from 19 pence in the pound and will outline a pathway where it rises to 23 pence in the pound by the time of the next general election, the report said. The move will raise an expected 12 billion pounds ($16.8 billion) a year, the report added.
According to the report, at least 1 pence is set to be added to the bill for business from this autumn, at a cost to business of 3 billion pounds, with further rises in subsequent years.
Allies of Sunak clarified he would not increase corporation tax higher than 23 per cent.
These measures will be helpful in paying for an extension to the furlough scheme, VAT cuts and business support loans until at least August.
Unlike the 2010 Conservative-led government, which pursued spending cuts to rebalance the economy after the global financial crisis, Sunak is expected to defer most of the toughest decisions about how to pay for that support in his budget speech.
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