U.K.’s Sunak Poised to Stick to Tax Pledges in March 3 Budget
(Bloomberg) -- U.K. Prime Minister Boris Johnson’s government is sticking to an election promise not to hike taxes on wages and sales next month, rejecting pressure to increase revenue to tackle the record deficit run-up during the coronavirus pandemic, according to a person familiar with the matter.
Chancellor of the Exchequer Rishi Sunak‘s budget next month will not raise income tax, national insurance or value added tax after the prime minister was clear he didn’t want to break the pledge, said the person, who was speaking on condition of anonymity because the plans are private.
Johnson vowed not to increase the three taxes during his campaign for election in 2019, but the economic damage caused by the pandemic called into question the commitment, which covers the Treasury’s biggest revenue raisers.
After almost a decade of austerity, there’s little appetite for spending cuts to shrink a deficit that’s on course to reach 400 billion pounds ($546 billion) this year. That’s put potential tax rises in focus as Sunak prepares to set out plans in his March 3 budget to start restoring the public finances.
But the prime minister has repeatedly said he doesn’t want to break the pledge. It was Johnson who persuaded the chancellor to honor the commitment, the Financial Times reported, citing unidentified Treasury officials.
Both Johnson’s office and The Treasury declined to comment on the plans.
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