IMF echoes call for co-ordinated 'tax cuts'

Date: 17th November 2008

The International Monetary Fund (IMF) has called for worldwide co-ordinated taxation cuts in a bid to revive the world economy.

In a statement, the IMF responded to the recent G-20 meeting in Washington DC, in which world leaders agreed that "fiscal measures [were needed] to stimulate domestic demand to rapid effect."

According to a report in the Telegraph newspaper, this could mean taxation cuts of up to two per cent of gross domestic product, which - if implemented - could save the average family up to £1,000.

Dominique Strauss-Kahn, managing director of the IMF, said: "It's time for co-ordination. I welcome the emphasis on fiscal stimulus, which I believe is now essential to restore global growth.

"Each country's fiscal stimulus can be twice as effective in raising domestic output growth if its major trading partners also have a stimulus package."

Last week, the Chartered Institute of Taxation called for a reduction in the rate of VAT, which it believed would kick-start the economy.