Corporation tax a shrinking part of the pie as UK tax take is increasingly focused on taxes that hit the poor
VAT, which hits the poorest hardest, is a growing proportion of UK government revenues, while corporation tax is shrinking as a percentage of the total tax take, according to figures released yesterday by the OECD.
Between 2010 and 2016 the proportion of tax the UK raises through VAT grew from 18.7% to 20.8% of total tax, an increase of 2.1%. By contrast the proportion raised by corporation tax decreased from 8.9% to 8.3% over the same period. Over the last eight years the government has slashed the corporate tax rate, and it’s due to fall further to 17% by 2020.
The figures come after a separate report by the OECD last week that ranked the UK 21st out of 33 countries for the amount of overall tax raised as a proportion of GDP.
Tax Justice UK Executive Director, Robert Palmer, said it was time the UK looked at rebalancing the UK’s tax take, away from regressive taxes like VAT, towards a greater focus on fairer taxes, such as those on wealth:
He said: “These figures, show that VAT is making up a growing proportion of the amount of tax raised in the UK, whilst the contribution made by corporation tax is decreasing.
“The UK needs to be looking seriously at how it taxes in a fair way, including through smart taxes on wealth. We should be correcting the over-reliance on VAT if we want truly good public services funded through fair taxes.”
In its pre-budget report, The World We Want, Tax Justice UK set out a range of reforms to wealth taxation to secure greater investment in the NHS and other public services.
The OECD revenue statistics report ‘Revenue Statistics 1965-2016’ is available here.
Contact: Paul Heden, Head of Communications, Tax Justice UK: 07413 729 505 or email@example.com;
Robert Palmer, Executive Director, Tax Justice UK: 07817 406618 or firstname.lastname@example.org