The biggest tax increases since 1993 may be on the way in Britain, after the country's finance minister, Rachel Reeves, presented the Labour government's proposal for a new finance bill on Wednesday. And it is particularly wealthy citizens and companies that will be hit by the tax.
Among other things, the Labour government will raise the tax on capital income from 10 to 18 percent. for smaller profits and from 20 to 24 percent for larger capital income.
- We need to promote growth and entrepreneurship and support the creation of wealth, while increasing the surplus required to finance our public services and restore public finances, Rachel Reeves said at a press conference on Wednesday afternoon.
She also pointed out that despite the proposed tax increases, Britain will still be the G7 country in Europe with the lowest taxes on capital income. The G7 is a collection of the world's leading economies. The other European countries in the group are France, Italy and Germany.
Capital gains tax must be paid on profits of more than £3,000 (DKK 27,000) from the sale of shares, for example. The tax rate is determined by how much the seller normally pays in income tax, and by how much profit is made on the sale of shares, for example.
In addition to higher taxes on capital gains, companies must pay more into the social security net every time they pay wages to their employees, according to the Labour government. The limit on how much employees must earn before the employer is obliged to pay into public social security benefits will also be lowered.
In addition, the British government will remove an exemption that currently exempts wealthy citizens from paying tax on foreign income, and increase the tax on oil pumped from the North Sea.
It is the first proposed finance bill that the Labour government has presented since it was formed in the summer.
/ritzau/Reuters
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