The demand from the influential Commons Treasury Committeefollowed estimates from PricewaterhouseCoopers which theConservatives claimed meant multinationals will have to find’several billions of pounds’ in additional taxation.
The government estimated the changes, which it announced in last month’s Budget, will raise £140 million in2001 to 2002.
But the committee was warned by tax adviser Edward Troup thatthe changes would reduce the remittance of dividends to theUK, act as a strong disincentive to multinationals investing inhigh tax countrie,s and affect location decisions by multinationals.
The Treasury claimed no outside advisers had been able toproduce evidence that their estimate is too low and claimed theoverall package will be of net benefit to multinationals, makingit attractive for them to do business in the UK.
MPs backed the CBI’s view that there was insufficient time forconsultation and pointed to cabinet office guidelines suggestingeight weeks is the minimum period for proper consultationscompared with the four weeks allowed on this issue.
The committee said consultations should be extended to the endof May.
Meanwhile, the second reading debate on the largest Finance Billever was concluded on Monday and detailed deliberations on willbegin as soon as MPs return after the Easter Recess.
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