The Institute for Fiscal Studies (IFS) has urged Chancellor Rishi Sunak to use the forthcoming Budget to raise taxes.
The think tank stated that the Chancellor either needs to raise taxes or ‘break a fiscal rule’ in order to avoid day-to-day spending cuts beyond 2021.
However, the Conservative Party’s election manifesto promised not to raise income tax, national insurance or VAT.
The IFS has also called on the Chancellor to abolish Entrepreneurs’ Relief and end the ‘ludicrously generous tax treatment of capital gains at death and of inherited pension pots’.
Commenting on the matter, Paul Johnson, Director of the IFS, said: ‘Rishi Sunak’s first Budget could be the most important fiscal event in years. It will set the direction of policy for the next five years. If this new government is going to make radical changes to taxes and spending, this surely is the time to do it.
‘There are plenty of tax rises which would both raise revenue from better off individuals and improve the coherence of the tax system.’
The Chancellor will deliver the 2020 Budget on Wednesday 11 March.