By Dipankar De Sarkar
London, (IANS) Indian-born steel tycoon Lakshmi Mittal was given a breather by the British government after its new chancellor of the exchequer Tuesday rejected opposition demands for a tax on high-profile non-domiciles in Britain, saying he did not want to discourage wealth-creation.
The decision by Alistair Darling, made in his pre-budget speech to parliament, came in response to a demand by the Conservative Party, which says there are 150,000 wealthy non-domicile taxpayers such as Mittal living in Britain, and that if each paid a tax of 25,000 pounds, the treasury would be richer by 3.5 billion pounds.
Non-domiciles do not have to pay taxes in Britain on account of a 208-year-old tax loophole. At the same time, an increasing number of them have been donating money to political parties. Of the 188 million pounds raised by all political parties from donations since 2001, 17.5 million pounds have come from so-called ‘Non-doms’. Of this, 8.9 million pounds went to Labour and 5.6 million pounds to the Conservatives.
Mittal’s role is key to the controversy, as the billionaire – the world’s fifth richest man – is the highest non-domicile financial contributor to the ruling Labour Party, having donated a total of 4.1 million pounds so far.
In his speech Tuesday, Darling dismissed the Conservative proposal, saying it was not based on facts.
The total number of non-domiciles in Britain was 115,000 and only some 15,000 of them would be eligible to pay a tax of 25,000 pounds, he said, adding that that would raise a total revenue of 650 million pounds a year – well short of the 3.5 billion pounds claimed by the opposition party.
“In addition, doctors and nurses and businessmen and women would be discouraged” from coming to Britain, he said, adding that these people “do contribute to the country’s wealth and we don’t want to turn them away”.