"IMF" demands Britain to cut public spending and reform the tax system
Amman2 min read
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The International Monetary Fund has called on the British government to focus on cutting public spending and reforming the tax system rather than imposing additional taxes on banks, as part of its efforts to balance public finances, according to the British newspaper The Guardian.
The newspaper quoted the Deputy Director of the European Department at the IMF, Helge Berger, as saying that there are other options available to the British government to provide additional financial resources, at a time when British Chancellor of the Exchequer John Healey is preparing the upcoming budget amid reports of a trend to increase taxes on banks.
Berger pointed out that the previous two budgets witnessed tax increases to boost government revenues, warning that continuing this approach may become less effective over time. He suggested updating property taxes and Value Added Tax (VAT) as options to expand fiscal space, while ruling out increases in labor taxes.
He added that taxes in Britain equate to about 40% of Gross Domestic Product, which is a high percentage according to the country's historical standards, making expenditure containment an important element in achieving financial balance.
The proposals referred to by the Fund included cutting spending by reviewing the guaranteed annual pension increase system, known as the "triple lock," and improving the targeting of social benefits to ensure they are directed to the most needy groups.
