Labour has justified its new Tourist Tax by arguing that Britain has comparatively low ‘sub-national’ tax rates and businesses are therefore ripe for another hit. You think?
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To justify itself the bottom of the press release claims “the United Kingdom has invested less in its future than any other G7 country over the past three decades” and: “According to the latest Organisation for Economic Co-operation and Development (OECD), the level of national taxes collected at the ‘sub-national level’ is far below the European Union average and is the lowest in the G7. In contrast, countries such as France, Japan, and the USA have much higher shares of local tax collection, enabling greater local investment.” About half of the USA’s tax is ‘sub-national’ because it is a federal system.
Obviously… That ignores the fact that countries with tourist taxes charge reduced VAT on hospitality: Italy and France 10%, Germany 7%, Belgium and the Netherlands 6%. Britain is set to levy a 27% rate… In addition recurrent property tax – council tax and business rates – makes up roughly half of British ‘subnational’ revenue. UK property taxes are 3.7% of GDP, above France (3.4%), Canada (3.4%), Luxembourg (3.3%) and Belgium (3.2%). On OECD data, the UK burden is the highest in the OECD as a share of GDP and more than double the average. Labour going in with the hammer again…
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