UK considers cutting corportation tax to 15% amid Brexit fallout

The British government is to consider slashing corporation tax to less than 15 percent in an attempt to maintain business interest in the country, amid a turbulent economy in the wake of the United Kingdom’s vote to leave the European Union.

In statements published in the British daily newspaper “Financial Times” (FT), Chancellor of the Exchequer George Osborne said that the measure, which would see the country offer some of the lowest corporation tax rates worldwide, is a clear message that the UK is “open for business.”

Although he did not indicate when the tax cut_currently at 20 percent_ would come into force, the plan is seen as a gesture to maintain the UK as a businessfriendly location and avoid a possible drain of capital in the wake of the “brexit” vote in the EU referendum on June 23.

Such a cut in corporation tax would put UK rates closer to those of the Republic of Ireland (12.5 percent), and much lower than the United States (39 percent) and Germany (30 percent).

Osborne said that part of his plan is to attract Chinese investment into the country, and boost investment in northern England, a region with high unemployment and where the “brexit” vote received strong support.

The chancellor said that Britain faced a “very challenging time” and urged the Bank of England to use its powers to avoid “a contraction of credit in the economy.”

His plan contrasts with the warnings he issued days before the referendum in which he suggested that a “brexit” win could see the necessary introduction of an emergency budget with higher taxes and higher spending to tackle the “shock” that the county’s economy could face.

Although the London Stock Exchange slumped upon the announcement of the “leave” victory, it has recovered in recent days.

However the pound continued its downward trend on Monday, falling 0.10 percent against the US dollar to 1.236 dollars, and was down 0.04 percent against the euro to 1.191 euros.

Opposition spokesman for the economy, John McDonnell, said that Osborne’s plan would make the UK a tax haven.

Osborne floated his plan after admitting last Friday that he would not meet his target of achieving a budget surplus of 0.4 percent of national income by 2020 due to the “brexit” fallout.

The Bank of England has prepared 250 billion pounds (297.5 billion euros) in case the UK economy requires monetary stimulus during the market volatility that the coming months are expected to bring.