UK Chancellor Of Exchequer Backpedals On Tax Cuts For Rich Fearing Popular Discontent

MOSCOW (UrduPoint News / Sputnik - 03rd October, 2022) The government of the United Kingdom has refused to cut tax from 45% to 40% for the rich due to popular discontent, UK Chancellor of the Exchequer Kwasi Kwarteng said on Monday.

On September 23, Kwarteng presented a plan to support the country's economy, which implies a large-scale tax cut. Kwarteng said that the government would cancel a planned increase in corporate income tax to 25% from 19%, and would cut a tax on incomes over 150,000 Pounds ($168,000) a year from 45% to 40%. The measure could have cost the government about 2 billion pounds a year. Kwarteng announced the lifting of the second measure, despite early statements from UK Prime Minister Liz Truss about the commitment to the original plan.

"However, it is clear that the abolition of the 45% tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.

As a result, I'm announcing that we are not proceeding with the abolition of the 45% tax rate," Kwarteng said on Twitter.

According to the official, the government "listened" to public opinion and will now focus on implementing the main measures of the new plan to support the economy.

Since the announcement of the plan, the yield on Britain's five-year government bonds has risen to its highest level since 2008, at 4.6%, which means a lower demand for British debt securities, triggering a barrage of criticism against the Truss government.

On Monday, Sky news reported that UK lawmakers are taking steps to trigger a vote of no confidence in Truss over the new support plan for the economy.