Latest news with #taxhikes
The Independent
17 hours ago
- Business
- The Independent
Tax rises are ‘inevitable' after Labour pledges billions for defence, top economist warns
Ministers are facing scrutiny over how the government plans to fund increased military spending, aiming for 3 per cent of GDP, amid warnings of necessary tax rises. Defence Secretary John Healey stated the government will detail how future increases will be funded, similar to reallocating overseas development aid to defence, but did not rule out tax hikes. Economists, including Paul Johnson from the IFS, suggest "chunky tax increases" may be inevitable to meet defence spending goals alongside other financial commitments. The defence review warns current armed forces are unprepared for conflicts with nations like Russia or China, citing inadequate resources and personnel issues. Despite concerns, Healey expressed confidence in achieving the defence spending uplift, banking on economic growth to support the plans, highlighting recent interest rate cuts and revised growth forecasts.
Reuters
a day ago
- Business
- Reuters
Planned Romanian spending cuts unlikely to prevent tax hikes, potential premier says
BUCHAREST, June 2 (Reuters) - Plans to cut state spending in Romania once a new government is appointed are unlikely to avert the need for tax hikes to rein in a hefty budget deficit and prevent a ratings downgrade, the leading candidate to become prime minister said on Monday. Having gone through a divisive presidential vote last month that closed a long and turbulent election cycle, Romania must now tackle the widest budget deficit in the European Union. The new centrist president, Nicusor Dan, faces the daunting task of nominating a prime minister to put together a majority government from four pro-European parties in parliament - which will then need to enforce austerity measures. The 2025 budget assumes economic growth of 2.5% in targeting a deficit of 7% of GDP - which analysts, ratings agencies and the European Commission say is virtually unattainable without tax hikes. The four parties are now discussing how to cut government spending before deciding on a package of tax hikes that is certain to be unpopular. "This package (of cuts) is very unlikely to avert tax hikes," Liberal Party leader Ilie Bolojan, Dan's first choice for prime minister, told reporters. The parties have yet to agree on cabinet appointments but Dan said he expected a line-up to be ready within two weeks. Romania's growth has steadily slowed since a post-pandemic bounce in 2021, and Brussels forecasts a budget deficit of 8.6% this year and 8.4% next, well above the 7% target for 2025 outlined in a seven-year plan approved by the Commission. A London source with knowledge of talks between Romania, the Commission and ratings agencies said Brussels wanted to see the yearly deficit-to-GDP ratio cut by three percentage points, with 2.5% coming from higher tax revenue and 0.5% from spending cuts. Romania is currently clinging to the lowest investment-grade rating from S&P, Fitch and Moody's, with a "negative" outlook. Election-induced market turmoil may have likely exacerbated the measures required as large capital outflows and central bank intervention to stem a slide in the leu currency have driven a surge in borrowing costs. Foreign currency reserves fell by 6.75 billion euros in May after what central bank governor Mugur Isarescu said were some of the largest capital outflows in Romania's history.
BBC News
2 days ago
- Business
- BBC News
Rose Njeri: Kenyan software developer's detention sparks outrage
Kenyans have expressed outrage over the detention of a software developer who created a tool to help people oppose the government's annual finance bill because of fears that it will raise the cost of Njeri was detained on Friday after police raided her home in the capital, Nairobi, and seized electronic devises, activists said. Police and the government have not yet commented on the detention of the mother of protests broke out last year after the government proposed tax hikes, forcing President William Ruto to withdraw the 2024 finance bill. The bill outlines the government's spending priorities for the next financial year, and how it intends to raise least 50 people were killed and dozens were abducted in a security force crackdown to end the protests that broke out last Society of Kenya (LSK) president Faith Odhiambo told the BBC Newsday radio programme that Ms Njeri's detention was a "recurrence of dictatorship".The 'tax collector' president sparking Kenyan angerBBC identifies security forces who shot Kenya anti-tax protestersOn Sunday, a group of activists gathered outside a police station in Nairobi, where the software developer is being held, to demand her release. Ms Odhiambo said that Ms Njeri - whom activists visited in prison - was "crestfallen" because with Monday being a public holiday, she had not yet been brought to to get her released on bail had failed, she added. "This has always been a government way of oppressing, intimidating and suppressing citizens because they know the courts don't sit over the weekend – and now we have a public holiday," Ms Odhiambo said. Boniface Mwangi, one of the activists who had visited Ms Njeri in custody, said she told them that police had ransacked her house and taken her phone, laptop and hard said she was worried about her two children."Imagine having to tell her children that she's in jail for developing a website that eases public participation for Kenyans who want to submit their proposals on the 2025 budget," he said on Njeri was detained after sharing a link to a site that flagged clauses in the bill that she said would lead to the cost of living escalating. It also allowed people to email parliament, calling for the bill to be also raised concern that a proposal to amend tax procedures, allowing the tax authority to access personal data without a court order, could undermine privacy rights. The new finance bill replaces the zero-rated tax provision on essential commodities with tax-exempt status. Zero-rated goods are taxed at 0%, and suppliers do not charge value-added tax (VAT) to customers but can still claim input VAT on the materials used in producing these goods. Tax-exempted goods are also not subject to VAT but suppliers cannot claim back input VAT, leading to higher prices for consumers or reduced profit margins for businesses, economists and activists minister John Mbadi recently admitted that tax-exempt goods may be "slightly more expensive" but explained that the move was necessary to close tax said the government had determined that traders do not pass the zero-rating benefit to consumers, while some make "fictitious and fake" claims for is scheduled to present the government's spending and tax proposals in parliament next week, Ruto apologised to Kenyan youth for "any misstep" in dealing with them since he took office in 2022. Last month, he said that all the people who had been abducted after last year's protests against tax hikes had been "returned to their families". You may also be interested in: How Kenya's evangelical president has fallen out with churchesKenyan president's humbling shows power of African youthProtesters set fire to Kenya's parliament - but also saved two MPsMourning mother's anger at Kenyan migrant smugglers Go to for more news from the African us on Twitter @BBCAfrica, on Facebook at BBC Africa or on Instagram at bbcafrica
Daily Mail
2 days ago
- Business
- Daily Mail
Starmer defies Labour clamour for tax hikes to fund more welfare as he hints at winter fuel allowance move soon - as MPs turn on Rachel Reeves
Keir Starmer defied a rising Labour clamour for tax hikes today as he hinted that details of the winter fuel allowance climbdown will emerge soon. The PM poured cold water on left-wing demands for 'wealth taxes' to fund spending on benefits and service, arguing that the burden is already 'high'. But he suggested there is room for action on the two-child benefit cap, and hinted an announcement on winter fuel payments is close. The comments came as a Survation poll found two thirds of Labour MPs oppose Chancellor Rachel Reeves ' fiscal rules - and a fifth favour tax rises over spending cuts. A revolt is brewing over proposed curbs to disability benefits, as the Treasury desperately scrambles to balance the books with the economy stalling and calls for more defence funding. It has emerged that Deputy PM Angela Rayner lobbied for tax rises instead of a welfare crackdown before the Spring Statement. The political danger to Sir Keir was underlined last week when Nigel Farage outflanked him by committing to axe the two-child cap and fully reverse winter fuel cuts. Reform has been enjoying a surge in the polls since the local elections, well ahead of Labour and the Tories. Interviewed on BBC Radio 4's Today programme, Sir Keir said: 'I want to look again at where the threshold is. That's for sure. I'll be clear with you. 'In relation to that, I do think it was our duty to stabilise the economy and to fill in that £22billion black hole. And I'm not going to resile from that.' Ministers 'need to be absolutely clear where the money is coming from' before they set out details of a partial U-turn on the winter fuel payment, Sir Keir said. However, he suggested that changes would be announced soon, and be in place for this winter. 'I take your point, which is that if we want to look again at which pensioners are eligible, then the sooner we have clarity on that, the better,' he said. The premier was also asked about mounting speculation that the two-child benefit cap will be scrapped. 'I don't think this is a silver bullet. I will say that straight away,' he said. 'I think there are many measures that contribute to child poverty, and therefore I don't take the sort of binary approach: 'It's either this or nothing'. 'On the other hand, as I say, as we go forward with this review, I am clear in my own mind that I want this Labour Government to bring down child poverty, and I'm determined that that is what we will do.'
Yahoo
2 days ago
- Business
- Yahoo
Illinois lawmakers pass $55 billion state budget Saturday
PEORIA, Ill. (WMBD) — Shortly after state legislators passed the fiscal year 2026 state budget, reactions poured in from politicians who were split down party lines. Many Republicans shared the same sentiment that the new budget was 'bloated' with what they felt were tax increases that hurt working-class Illinoians. The state Democrats, on the other hand, rejoiced over the budget, with many claiming it would help fund much-needed entities such as schools and healthcare and help offset turmoil in Washington, D.C. Republican Rep. Ryan Spain, who represents the House's 73rd District, which includes areas north of Peoria such as Dunlap, Princeton, and Geneseo, denounces the budget and what he says is nearly $1 billion in tax hikes. 'Our state has been in an uncertain financial position for decades, thanks to years and years of financial malfeasance at the hands of the Democratic majority, who have maintained their artificial majority thanks to some of the worst gerrymandering in the entire country,' he said. 'So, it doesn't surprise me that Democrats again violated their own House Rules to ram through the near-largest spending plan in state history that robs the road fund to pay for standard operating expenses, gives legislators another pay rise, diverts funds meant for property tax relief and slaps the people of the state of Illinois with $1 billion in tax hikes. This budget doubles down on years of failed economic strategy that has caused our state to fall behind all our neighbors. The people of the state of Illinois deserve better from their government.' Democratic Sen. Dave Koehler, who represents the Senate's 46th District, including Peoria, East Peoria, and most of Bloomington, celebrated the passing of the budget, citing the support of healthcare. 'This year's budget demonstrates our commitment to providing all Illinois residents with high-quality access to health care,' Koehler stated. 'Our Investment in community-based providers makes certain that essential healthcare services remain available and open for vulnerable residents both in the 46th district and across the state.' Republican Rep. Dennis Tipsword, who represents Illinois' House's 105th district, and he felt the budget was 'bloated' and is sending Illinois 'down the wrong path.' 'The more things change, the more they stay the same in Illinois. Democrats have passed another bloated budget that includes $1 billion in targeted tax increases,' Dennis Tipsword (R-Metamora) said. 'On top of the tax increases, Democrats rewarded themselves with a huge pay raise and pork projects dedicated to their districts. 'Spending has increased by 38 percent in the last six years, a path and pattern that is simply unsustainable. The process to pass this year's budget was again shrouded in secrecy and behind closed doors,' he said. Democratic Rep. Jehan Gordon-Booth, who represents the House's 92nd District, including Peoria, Peoria Heights, and Bartonville, feels it is a responsible and compassionate budget that supports schools, healthcare and helps tackle challenges in Washington, D.C. 'This document puts people first, and reflects a balanced approach in a challenging time,' Gordon-Booth said. 'We're unable to count on the federal government to be an ally on critical issues that help families, and the economic uncertainty caused by reckless cuts and tariff plans further compelled us to develop a forward-thinking budget that has flexibility with funding reserves. By making necessary cuts, we're ensuring we can maximize our resources on priorities that matter to families. 'We took steps forward, but more work remains. I'm going to continue fighting for families so that we can build a brighter future for every community,' she said. Republican Sen. Neil Anderson, who represents the Senate's 47th district, which includes Pekin, Kewanee and Carthage, stated that this is the largest budget in Illinois history, and it hurts Illinois families. 'While Illinois families are cutting back to survive, Democrats just pushed through a $55 billion spending plan, the largest in state history,' he said. 'Worse yet, it comes with nearly a billion dollars in new tax hikes. The budget will mark a nearly 40% increase in state spending since Governor Pritzker took office. 'Our state is already one of the most overtaxed in the nation, yet instead of providing relief to working families and small businesses, Democrats chose greed over responsibility. The result? Businesses are closing. Families are fleeing. And Springfield's insiders keep cashing in while the rest of us pay the price. This isn't leadership, it's exploitation. It's economic warfare against the very people they claim to serve,' he said. Republican Sen. Li Arellano Jr., who represents the Senate's 37th District, which includes Dunlap, Geneseo and Dixon, shared a very similar sentiment as his colleague Anderson. 'Illinois Democrats have just rammed through the largest and most reckless budget in our state's history, over $55 billion in spending, passed with zero transparency, minimal debate, and no regard for the taxpayers who are footing the bill,' he said. 'This isn't leadership. It's political corruption, plain and simple, snuck in during a midnight vote. 'To make matters worse, they're hitting working families with nearly a billion dollars in new taxes. Democrats keep demanding more from you while delivering less. Less public safety. Fewer job opportunities. Less economic growth.' Gov. JB Pritzker shared the same views as his Democratic Party members, saying this was his seventh balanced budget. 'The passage of the FY26 balanced budget is a testament to Illinois' fiscal responsibility,' Pritzker said. 'Even in the face of Trump and Congressional Republicans stalling the national economy, our state budget delivers for working families without raising their taxes while protecting the progress we are making for our long-term fiscal health. I'm grateful to Speaker Welch, President Harmon, the budget teams, and all the legislators and stakeholders who collaborated to shape and pass this legislation. I look forward to signing my seventh balanced budget in a row and continuing to build a stronger Illinois.' Republican Rep. Travis Weaver, who serves the House's 93rd District, which contains Pekin, Brimfield, and Kewanee, shared his quarrels with the budget, saying it is 'outrageous and egregious spending.' 'This year's $55.2 billion budget is $2 billion more than last year and 38 percent higher than it was just six years ago. This is outrageous and egregious spending, and to top it off the majority party is raising taxes by $1 billion to 'balance' their budget hole, he said. 'Illinois does not have a revenue problem, it has a spending problem. We have to tighten our belts, cut waste, and respect our taxpayers and their hard-earned dollars. 'This year's budget process once again involved zero transparency and bills introduced in the final moments of session with no time for actual debate or input. The budget is so bloated it required multimillion-dollar pork projects targeted for Democrat-controlled districts intended to gain their 'yes' vote,' he said. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
