The plans are aiming at fighting social and health crises.
Prime Minister of the United Kingdom Boris Johnson presented plans on Tuesday to raise taxes on workers, employers, and certain investors.
The initiative is brought up to fight the global pandemic and its consequences, as well as improving the social situation in the country, one of Johnson’s election pledges.
The British healthcare system has suffered a lot during the pandemic and cost billions of pounds to the government.
"It would be wrong for me to say that we can pay for this recovery without taking the difficult but responsible decisions about how we finance it," Johnson addressed Parliament.
The Prime Minister revealed that the rate of National Insurance payroll taxes paid by both workers and employers is planned to be raised by 1.25%. The same increase will also be applied to the tax on shareholder dividends.
According to his estimations, the measure will create some £36 bln ($49.6 bln) in the three years to come.
"You can't fix health and social care without long-term reform. The plan I'm setting out today will fix all of those problems together."
Shortly after the announcement, the pound fell against the euro and dollar. Johnson’s Conservative Party was unpleasantly stirred by the proposition since the Tories have always proclaimed themselves low tax guardians.
The Labour Party opposition reproached the PM for breaking his pledges. In 2019 Johnson presumed that he had a decent social care plan.
"This is a tax rise that breaks a promise that the prime minister made at the last election. Read my lips, the Tories can never again claim to be the party of low tax," the party’s leader Keir Starmer said.
British businesses have already warned that the project might aggravate damage caused by the pandemic.
"This rise will impact the wider economic recovery by landing significant costs on firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit needed to drive the recovery," economist of the British Chambers of Commerce Suren Thiru said in a statement.
Experts believe that the project will unfairly hit the youth and lower-paid workers, highlighting that Johnson presents no clear social reform.