The UK business lobby group the CBI is calling on the Chancellor George Osborne to use his March Budget to reform environmental taxes and give the economy a much needed boost.
The CBI says, in its submission to the 2012 Budget, that changing the UK tax system to reduce the burden on businesses will stimulate investment and support jobs.
The organisation suggests introducing a new capital allowance for types of infrastructure that do not currently qualify and providing new financial mechanism for companies taking on staff.
But more controversially, the CBI, says the Chancellor must ensure that environmental taxes to not undermine business growth and investment.
“We’re calling on the Government to make some targeted changes to the UK tax system, which could make an impact on business decisions and create new opportunities for growth,” says director-general John Cridland.
The Carbon Reduction Commitment (CRC) energy efficiency scheme should be scrapped, says the CBI, and replaced with a new Climate Change Levy (CCL) and mandatory carbon reporting.
The change would cut “confusion and complexity” for businesses while protecting the Treasury’s revenue stream, which it now receives from the CRC scheme.
The CBI also suggests keeping the Air Passenger Duty to 5%, the same rate as inflation, instead of the planned increase to 8%.
“Companies that lack certainty on how they will be taxed in the future are reluctant to invest, so the government must deliver on its corporation tax roadmap without delay,” says the CBI’s chief economic adviser Ian McCafferty.
The government’s stance on green taxes was also highlighted earlier this month by the Environmental Audit Committee. In a strongly critical report, the Committee called on the government to define what is meant by a ‘green’ tax and develop a coherent strategy.
For further information:
UK government promises to continue supporting onshore wind (7-Feb)
UK government chided over stance on ‘green’ taxes (6-Feb)
UK spearheads private investment drive to tackle climate change (31-Jan)
Optimism in UK clean tech sector picks up, says Ernst & Young (16-Dec 2011)
22 February 2012