London: India may soon overtake Britain as a favoured investment destination in the world unless Chancellor Alistair Darling cut taxes in tomorrow’s budget, a leading consultant agency has said in its report.
Businessmen here have demanded a radical overhaul of corporate tax. Thousands of people of Indian origin are keenly awaiting the budget amidst reports that non-domicile residents in Britain are expected to be taxed 30,000 pounds.
In its report titled “Finding its way: a return to the competitive path for Britain?”, Ernst & Young recalled that in its European Attractiveness survey for 2007, UK had been overtaken by India and Russia and equalled by Poland.
Chris Sanger, head of tax policy at Ernst & Young, said: “Other countries and regions in Europe have stolen a march on the UK by offering fiscal incentives and tax breaks that are proving to be a great success.
“Although Gordon Brown as Chancellor announced the reduction in the main rate of corporation tax from 30% to 28% from next month, many would argue that is just not enough to make the UK a competitive place to do business.”
In a report titled, ‘UK business tax: a compelling case for change´, the Confederation of British Industry (CBI) said that the UK had “now reached a tipping point”.
It said: “The ever rising business tax burden and the failure of the tax system to respond to increasingly global business activity is creating a corporate tax system which is unsustainable in the long-term”.
Richard Lambert, the CBI’s director-general, said: “Our traditional tax system is no longer fit for the purpose and is making the UK look increasingly uncompetitive.