BCC: Chancellor must tread carefully

Date: 18th June 2010

Chancellor of the exchequer George Osborne has been urged to "tread carefully" when announcing changes to the UK tax system in next week's emergency Budget.

The British Chamber of Commerce (BCC) has warned that increasing taxes could have a "punishing" effect on the country's businesses.

David Frost, director-general of the BCC, said: "The chancellor must tread carefully to avoid introducing damaging new taxes that negatively affect private-sector growth.

"Short-term revenue gains would be outweighed by longer-term economic consequences, from reduced business investment to lower rates of job creation. Any tax rises must be focused on consumption taxes rather than payroll, income or profits."

The expert said that the majority of the measures introduced to reduce the UK's "unsustainable" deficit should come from public sector spending cuts rather than imposing "punishing tax hikes" on the country's small and medium-sized businesses.

Mr Osborne is scheduled to deliver the new coalition's first emergency Budget at 12:30 on June 22nd.

Posted by Jacob Williams