Reeves Targets Tax Loopholes in Landmark Budget

British finance minister Rachel Reeves announced reforms to tighten the non-dom tax rules, aiming to raise £12.7 billion over five years. This move aligns with Labour's commitment to enhance public services funding, despite potential backlash from wealthy non-domiciled residents threatening to leave the UK.

In a bold move, British finance minister Rachel Reeves unveiled plans to close tax exemptions that allow wealthy, often foreign, residents to dodge taxes on overseas income. This initiative aims to generate £12.7 billion ($16.47 billion) in revenue over the next five years.

Reeves declared the Labour government's intent to introduce a new, residence-based tax scheme and eliminate certain loopholes. Addressing parliament, she emphasized that those making Britain their home should contribute their fair share of taxes here.

Since Labour's sweeping electoral victory in July, efforts to engage with the business elite have been evident. However, this tax reform is crucial for meeting promises of increased public service spending. Some non-dom status individuals, advised by private banks, have signaled potential departures in response to the tax increase.

(With inputs from agencies.)