Call for mayors to get a share of corporation tax
The thinktank Centre for Cities is proposing that the UK government allow regional mayors to retain 2% to 5% of corporation tax. This policy is intended to incentivize local leaders to prioritize economic growth and business development in their regions.
Why it matters
Fiscal devolution could significantly alter the balance of power and economic strategy between the UK central government and regional authorities.
Centre for Cities has called for government to extend fiscal devolution to corporation tax to incentivise mayors to focus on growth.
In a briefing published today, the thinktank suggested mayors should get between 2% and 5% of corporation tax and that this would would be complementary to devolving a share of income tax and business rates.
Centre for Cities argued that including corporation tax in fiscal devolution means mayors would get funding from both residential areas and commercial areas in their region.
The briefing went on to say a devolved share of corporation tax to mayors could be more equitable than devolving business rates and council tax. It said applying a share of corporation tax based on total wage bill meant receipts would vary along pay and employment, which have less national variance than house prices or commercial property prices.
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