Tax competition: How to remain competitive?

Statutory corporate tax rates have been lowered in the United Kingdom and elsewhere, while tax bases have been broadened. This has rendered corporate tax systems more efficient. Falling tax rates are not a proof of tax competition, but consistent with it. While the United Kingdom was early in cutting tax rates and had strong tax competitiveness, others have caught up. And some countries now have considerably lower tax rates, even after the recent announcement to cut the UK statutory corporate tax rate from 30% to 28% in 2008. This chapter assesses options to preserve international competitiveness.