There is less than 2 months left before Britain votes on June 23 referendum on whether to remain in the EU. The OECD warning on the potential economic impact of Brexit Tax will come as a major blow for people campaigning for the UK to leave the nation.
Angel Gurria, the secretary general of the Organization for Economic Cooperation and Development (OECD) stated via The Telegraph, "The responsibility borne by British voters on June 23 is very serious indeed. It will be an act of intergenerational responsibility.
In some respects, Brexit would be akin to a tax on GDP, imposing a persistent and rising cost on the economy that would not be incurred if the UK remained in the EU. By 2020, GDP would be over 3% smaller than with continued EU membership, equivalent to a cost per household of £2,200.00 at today's prices. The rest of the EU would see GDP shaved by one percentage point by the decade's end."
According to Finance Feeds, he immigration accounts for one-half of UK GDP growth since 2005, with more than 2 million jobs created. Restraining to the free movement of labor from the EU and a weaker economy after exit would gradually lessen the incentives for economic migration to the UK and would be a cost to the economy.
Loss of unrestricted access to EU's single market would be one of the biggest blows to the UK's economy, resulting in higher tariffs for goods and other barriers to trading with the EU. The UK would also lose out on trade deals the EU currently has with other third-party countries and blocks, This Is Money has learned.
Britain is a net contributor to the EU budget, and would save around 0.3-0.4% of GDP per annum after Brexit Tax. Describing it as a relatively lower GDP growth would weigh on the fiscal position significantly, limiting the scope to use the net EU budget savings to relax fiscal policy.
