Parties Should Ensure any Tax Change Pledges are not just a Popularity Contest for the 2015 General Election, says ACCA
ACCA (Association of Chartered Certified Accountants) feels that politicians will either have to provide enough resources to HMRC so that can get revenue to increase, required to make national economy stable, or simply increase taxes to fulfill the purpose.
Association of Chartered Certified Accountants head of taxation, Chas Roy Chowdhury, said (just before session of conservative party) that it does not matter which political party wins the upcoming elections, it is nearly sure that taxes will increase. He further added that political parties’ leaders must look to increase Value Added Tax to twenty one percent, raise NIC (National Insurance Contribution) or decrease the minimum level at which IHT (Inherit Tax) becomes liable. Only this way they will be able to raise funds required to render the services needed and resultantly make economy stable.
He continued that to increase taxes will not be a popular election decision and any alterations made to Inherit Tax or National Insurance Contribution (which would make employers pay more tax) will not result in desired funds being obtained. This leaves increase in Value Added Tax as the least-worst choice. Providing more funds and resources to HMRC, to facilitate it, in order to collect billions of pounds of taxes unpaid is an alternate option.
Roy added that the tax evasion (which is illegal) and tax avoidance are taking place in the country. One of the reasons allowing tax avoidance is complicated legislation. HMRC estimated that approximately 30billion pounds have been lost due to tax avoidance schemes. Now HMRC needs to cope with these problems. Hence, resources are required, to enable it, to trace tax avoidances and tax evasions and to deal with the complexities found in the legislation. This is the issue to ponder over rather than simply increasing taxes for general public and normal businesses.