LONDON (Reuters) – Low corporation tax rates might not be the best way to attract capital investment, British finance minister Rishi Sunak said on Wednesday after announcing the country’s first hike to the rate in nearly half a century.
Sunak said that the decision to hike corporation tax to 25% from 19% was no judgment on the merits of his Conservative Party’s pre-pandemic policy, but added that a “super deduction” also announced on Wednesday might be a better way to boost investment.
“I think with corporation tax, over time, what’s transpired is it might not be the most effective way to drive capital investment up, which is what we want to see,” Sunak said at a news conference.
“We think our super deduction hopefully will do a better job of that over the next two years.”
(Reporting by David Milliken, writing by Alistair Smout; editing by William James)