Integrity of system must be maintained: ICAS

Tax experts in Scotland today called on the Chancellor to maintain the integrity of the tax system, in spite of being under severe financial and political pressures that were evident in yesterday’s Budget decisions.

The Treasury is currently consulting on the proposal that the Government should adhere to certain key principles in its approach to making tax policy for business, and ICAS maintains that the same principles should be adopted for all taxes.

The draft framework reflects broadly the spirit of the four tenets of taxation propounded in the 18th century by Adam Smith, the father of political economics, said the Institute of Chartered Accountants of Scotland (ICAS). The document expresses in contemporary terms the commitments in principle to competitiveness, fairness, the minimising of distortions, simplicity, stability and certainty, the improvement of tax administration and the lowering of tax compliance costs.

In its response to the Treasury document, ICAS today offered its support for the thrust of the plans in committing the Government to consulting ahead of proposed tax changes, publishing draft legislation for more complex reforms in sufficient time to allow input from interested parties, assessing the proposed changes against the key principles, and publishing updated notes explaining the new provisions at each stage in the parliamentary process.

‘We think it’s crucial that any Government should follow these general principles throughout the tax system,’ said ICAS director of tax Derek Allen.

‘This becomes particularly important as we approach a general election at a time of grave economic uncertainty, since instability and uncertainty in exposure to taxes will alter the behaviour of businesses and individuals in unpredictable ways.’

Categories: News , Budget 2010