THE INTERNATIONAL tax system is weighted against small and medium-sized enterprises (SMEs), according to a new report released by the Cornwall Chamber of Commerce out today.
Seven times as many business leaders believe that the system is biased against small and medium-sized companies than believe the system treats them equally, according to the research.
Despite opposing a harmonisation of the UK’s income tax rates with the rest of Europe, the owners and managers of firms surveyed did favour international co-operation to make sure that multinational companies are taxed proportionally, based on the revenue they generate in each country.
The Cornwall Chamber of Commerce’s chief executive, Kim Conchie, commented: “Many business leaders feel the current system of international taxation provides major multinationals with a competitive advantage over companies whose operations are restricted to domestic markets.”
He added: “For businesses to thrive we need a system of taxation that is equitable and that does not disproportionately impact the ability of smaller businesses to compete in the market.”
According to KMPG’s figures for 2013, the UK’s highest tax rate for individual income, 45 per cent, is equal to that of France and Germany, but below Spain’s 52 per cent. Across the whole of Europe, the average top rate of tax is lower, at 34.28 per cent.
The UK’s corporate tax rate is lower than other large EU countries, at 23 per cent, from 28 per cent in 2010. The UK government has been bringing the rate down.