New research has revealed that the Conservatives are poised to implement the most significant tax hike among a group of similar countries.
According to the Institute for Fiscal Studies, an economic think tank, government revenues as a proportion of national income are projected to experience the most significant increase between 2019 and 2029 compared to 37 similar countries.
The UK's tax burden, compared to the G7 average, is projected to decrease significantly under the government's fiscal plans. According to the IFS study, the difference is expected to nearly halve from 5.3% in 2001 to 2.8% lower in 2029.
Despite the significant increase in government revenues, the tax burden in the UK has stayed below the averages of both the G7 and comparable countries. Meanwhile, public spending has continued to rise steadily. The Institute for Fiscal Studies notes that government spending is expected to converge with the average of the 37 countries in the medium term. Achieving this alignment would necessitate further tax increases to stabilise the public finances.
The forecast indicates that government revenues as a percentage of national income within the comparable group are expected to decline over the medium term. However, despite the UK's comparatively lower tax burden and the anticipation of a larger role for the state, the government would still need to implement tax increases amounting to £43 billion to reach the average of the comparable group, according to the IFS.
Additionally, the Office for Budget Responsibility projects that the tax burden will escalate to nearly reach a post-Second World War high of 37.1% in 2029.
