Rishi Sunak, trailing in the race to become Britain’s next prime minister, has pledged to cut the basic rate of income tax by 20% by 2029 in a potentially decisive roll of the dice. former Minister of Finance.
Mr Sunak, once seen as the favorite to replace Boris Johnson when he helped steer the economy through the ravages of the COVID-19 pandemic, has battled his rival, Foreign Secretary Liz Truss, who promised immediate tax cuts.
Mr Sunak said he remains focused on tackling inflation, but once that target is achieved he will follow through on an already announced plan to cut income tax by a penny in 2024 , then to be reduced by an additional 3 cents by the end of the next legislature, probably around 2029.
Both promises would raise income tax from 20p to 16p.
Mr Sunak said the plan would mark the biggest income tax cut since the days of Margaret Thatcher.
“It’s a radical view but it’s also a realistic view,” he said in a statement on Sunday, a day before Conservative Party members began receiving their ballots to vote for the new party leader.
Britain’s search for a new prime minister was sparked on July 7 when Johnson was forced to announce his resignation after months of scandal. Tory lawmakers have narrowed a field of candidates to Ms Truss and Mr Sunak, with an announcement of the decision by party members scheduled for September 5.
With inflation hitting a 40-year high of 9.4% and growth stalling, the economy dominated the early stages of the contest, with Mr Sunak arguing that Liz Truss’ plan to reverse a dues hike social security and canceling a planned corporate tax increase would further fuel inflation.
Mr Sunak said every penny cut in the income tax rate would cost around £6bn ($7.3bn) a year, a figure he said would still allow the debt-to-GDP ratio to rise. Britain to fall, if the economy grows in line with official forecasts.
Ms Truss argued that tax cuts are needed now to kick-start the economy. A recent poll by YouGov showed that Tru
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