Labour leader Jeremy Corbyn is set to impose a hike in corporation tax as part of the party’s manifesto.
Corbyn wants to hike corporation tax to 26% by 2020/21 from its current rate of 19% in order to fund schools and college grants.
The move would reverse Conservative plans to cut corporation tax to 17% by 2020. Prime Minister Theresa May has signalled she will press ahead with the corporation tax reduction if she is elected.
Corbyn said: “We will reverse the Conservatives’ tax giveaways to big business and put money back where it belongs, in our schools, our colleges and our communities.”
Institute for Fiscal Studies director, Paul Johnson, said the prospective corporation tax rise would be “one of the biggest increases in the last 30 years”.
He also warned that such a tax hike could discourage business investment and have a detrimental impact on tax revenues in the longer term.