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British business faces a tax hike of more than £4bn over the next three years, the CBI has predicted.
The net increase comes despite the 2p cut in headline corporation tax and undermines the Government's claim to be boosting the UK's international tax competitiveness, said the institute.
It added that at a time of economic slowdown and uncertainty, ministers should be helping business keep the economy growing, not raising taxes.
The CBI's analysis of new tax rules claims that UK businesses will pay a net total of £4.21bn in taxes by 2010/11, on top of existing financial demands: an extra £1.84bn in tax in 2008/9, £1.24bn in 2009/10, and £1.13bn in 20010/11.
The majority of this, said the CBI, comes from the loss of plant and machinery investment allowances and the abolition of empty property relief.
The organisation's deputy director-general, John Cridland, commented: 'When the economy is slowing, the last thing a Government should do is raise taxes on the part of society which creates jobs and wealth — but that's what's happening.
'The consequence will be that hard-pressed companies, which are already paying high rates of tax, will find life getting even tougher.
He continued: 'The UK has been slipping down the league table for international tax competitiveness for years and has become increasingly less attractive to overseas investors.
'This has been exacerbated by the abrupt changes to capital gains tax and the poorly handled reforms of non-domicile taxation: personal issues rather than business tax but ones that heavily influence the general business climate.'
Last month an independent taskforce commissioned by the CBI published its analysis of the UK tax regime and argued that the system was in need of a radical overhaul.
It claimed that cutting the headline rate of corporation tax to 18% over eight years was not only affordable but would also boost tax receipts over the long term.
