An ongoing debate is currently brewing among politicians and business circles in the UK involving the merits of implementing a “flat tax” system in the country.
The idea for a single flat tax for both individuals and businesses was first implemented in Estonia and Lithuania during the 1990’s. Since then, the policy has spread into other Eastern European countries like the Ukraine, Romania and Slovakia.
Now that idea has reached Britain and is beginning to create a buzz in the country.
Shadow Chancellor George Osborne is championing a change in Britain’s multi-tiered tax system and is asking the country to investigate the merits of the flat tax system.
He is asking for an independent commission to study his proposal in depth and look at ways on how to overhaul the country’s tax collection policies. Liberal Democrats have already supported his calls for an investigation and the idea is likely to be discussed at length during the party’s conference in the coming month.
Britain’s Treasury, on the other hand, has rejected the flat tax suggestion.
Flat tax system supporters contend that this new taxation policy will benefit a large number of taxpayers while boosting the national economy.
Under the flat tax scheme, all income tax or corporation tax that goes over a specified untaxed allowance will be set at the same rate.
According to flat tax advocates the scheme will lower tax rates, encourage compliance among tax payers and cut administrative costs of running a business. Such a positive development may encourage entrepreneurs to href=”http://www.dolphinformations.co.uk/”>set up new companies and venture into new businesses.
But Osborne clarified that he doesn’t want a pure flat tax system because it might mean negatively affect pension tax relief.