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CHAMBERS' TAX SURVEY HIGHLIGHTS CAPITAL GAINS TAX CONCERNS
[ 14-06-2010 ]
Scottish businesses have a range of concerns regarding UK Government plans to raise the rate of Capital Gains Tax (CGT) dramatically from 18% to 40% or even 50% in this month’s emergency Budget. That was one of the key findings from a snap survey by Chambers of Commerce in Scotland conducted among Scottish businesses. Commenting on the results, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:
“The prospect of a rise in the rate of Capital Gains Tax is clearly causing concern for many Scottish businesses, and the fact is that many are already taking action in anticipation of moves by the UK Government to substantially increase the rate of CGT. If even the prospect of a CGT rise is having such a material effect in terms of asset divestment, the effects of its ultimate implementation are likely to be onerous indeed.
“Of course, any tax rise is unlikely to be popular, and business does recognise that fiscal revenues must increase if the national goal of deficit reduction is to be achieved. However this only serves to underline the need for Government to set out a clear rationale for any tax rises it is planning in terms of its decision to target that particular tax, the additional revenues it expects to receive and how those revenues will be invested.
“CGT has historically been utilised as a tool by Government to encourage and reward entrepreneurship, and many businesses are clearly unconvinced of the wisdom of imposing dramatic increases in the rates of CGT during a phase of fragile economic recovery. If a rise in CGT is unavoidable, then there must be clear exemptions and reliefs for business activity alongside taper relief and indexation.
“Just as Government is right to subject its spending to scrutiny, so must it expect business to scrutinise the taxes we pay. At all times, Government must remember that economic recovery and deficit reduction will ultimately be down to business to deliver, and we need the resources and encouragement to develop new business opportunities and create new jobs.”
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