IMF Warns on October 26 over UK Tax System: Room for Tax Rises Is Nearing Its Limit
On October 26, the International Monetary Fund issued an important warning about the UK's increasingly stretched tax system, arguing that further tax rises could damage economic growth, dampen investment and place greater pressure on households and businesses. The warning came just before UK Chancellor of the Exchequer John Healey is due to deliver his first autumn budget on October 28, with the government facing difficult choices between public spending, borrowing and how to raise revenue. The IMF believes the UK's tax burden is close to historic highs and that the room for policymakers to raise large amounts of revenue through traditional tax rises is increasingly limited. The assessment has intensified debate over whether the UK needs fundamental tax reform rather than another round of tax rises aimed at workers, businesses and investors. Economists also point to the growing complexity of UK tax arrangements, including frozen income tax thresholds, council tax, National Insurance contributions and the treatment of capital gains tax. The core question facing the Treasury is no longer simply “how much more can be raised”, but whether the current tax system can raise the money needed without weakening the economic activity that funds public services. At the same time, the UK government has committed more than 1 billion pounds in additional funding for social and affordable housing, further expanding the ten-year housing plan, but the latest figures show new home building has fallen sharply, putting the 1.5 million homes target in doubt. Whether the budget can hold its ground amid gathering uncertainty will be the biggest focus of the UK economy this week.
Source: GSM · USA (original Chinese edition)
Photo: 伦敦白厅（资料图）。摄影：Paul the Archivist，CC BY-SA 4.0，取自 Wikimedia Commons。Photo: Whitehall, London (file photo). Credit: Paul the Archivist, CC BY-SA 4.0, via Wikimedia Commons.
