The shadow chancellor, George Osbourne, has promised to cut corporation tax by three per cent if the Tories are returned to office.
Speaking to the Financial Times ahead of Gordon Brown's 11th Budget today (March 21), he said that his party would lower the tax from 30 per cent to 27 per cent.
The cost - around £4.5 billion - would be offset by phasing out various capital reliefs in the corporation tax system, he said.
"We're confident we can achieve this as part of a major reform of corporation tax," he said. "This is an entirely self-contained, and self-financing, simplification of the business tax system."
More competitive tax system
He admitted that scrapping tax reliefs would affect some companies adversely, but said that even these firms would benefit from a simpler and more competitive tax system.
Business organisations have been calling on the government to lower taxation on UK business in order that the country can retain its competitiveness in an increasingly global economy.
Mr Osbourne believes that 30 per cent tax is an uncompetitive rate.
Meanwhile, Gordon Brown is expected to deliver a Budget that will benefit business in the UK.
© Adfero Ltd
