Rishi Sunak said the tax cut would be the biggest since the days of Margaret Thatcher. (File)
London:
Rishi Sunak, chasing the race to become Britain’s next prime minister, has announced a 20% cut in the basic income tax rate by 2029 in a potentially fatal dice roll by the former finance minister. main.
Mr Sunak, once seen as the favorite to replace Boris Johnson as he helped steer the economy through the devastation of the COVID-19 pandemic, has struggled against his rival, Foreign Secretary Liz Truss , who pledged immediate tax cuts.
Mr Sunak said he remains focused on tackling inflation but once that is achieved he will follow through on the announced plan to reduce income tax by 1 cent by 2024 and then reduce it by 3 cents. at the end of the next parliamentary session, probably around 2029.
The two sides commit to pay income tax from 20p to 16p.
Mr. Sunak said the plan would mark the biggest income tax cut since Margaret Thatcher.
“It is a radical vision but also a realistic one,” he said in a statement Sunday, a day before Conservative Party members began receiving their votes to elect the leader. the new leadership of the party.
The hunt for Britain’s new prime minister began on July 7 when Johnson was forced to announce his resignation after months of scandal. Conservative lawmakers pulled a string of candidates down to Ms. Truss and Mr. Sunak, with the announcement of the party members’ decision on September 5.
With inflation surging to a 40-year high of 9.4% and growth stalling, the economy prevailed in the early stages of the competition, with Mr. Sunak arguing that Liz Truss’s plan was to reverse course. countering the increase in social security contributions and canceling the planned corporate tax increase would cause further inflation.
Mr Sunak said every penny of income tax cuts would cost around £6 billion ($7.3 billion) a year, a figure he said would still allow Britain’s debt-to-GDP ratio to drop. if the economy develops commensurately. official forecast.
Ms. Truss argues that tax cuts are needed now to give the economy a chance. A recent YouGov poll shows that Tru
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