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Tax experts have welcomed proposals from the Treasury for improvements to the tax policy-making process, published today in the discussion document.
The Chartered Institute of Taxation (CIOT) was the first to applaud the release of Tax Policy Making: a New Approach, having long campaigned for reform of the tax law process. The professional body published a paper in which it called on ministers for improvements in the system and for the introduction of US-style joint committee on taxation.
The Government’s new document – which was unveiled in the so-called emergency Budget and claims that 'better tax policy-making needs to be underpinned by greater transparency' – is 'a big step towards improving the way UK tax law is made,’ said CIOT president Vincent Oratore.
‘Our tax law process is deeply flawed: there is not enough expert scrutiny, and there is insufficient parliamentary time to consider properly the effect that changes will have in practice.
'As a result, we often end up with badly constructed laws, which give some taxpayers unintended opportunities to avoid tax while others face unintended losses.'
Mr Oratore welcomed the coalition administration’s encouragement to the Treasury Committee to look at how Parliament’s role in scrutiny of tax legislation can be strengthened.
‘We will be seeking to engage with the committee as well as with the Government over the summer, to put forward our ideas in this area,’ he said.
David Brookes, a tax partner at BDO, warned that 'it would be all too easy for an incoming Government to view tax simplification as a worthwhile-but-not-pressing technical exercise... This would be a mistake notwithstanding the magnitude of the fiscal and economic challenges in the aftermath of the credit quake and would represent a significant missed opportunity and, therefore, the commitment made by the Treasury today is to be welcomed.'
He added: 'It is imperative that ministers engage constructively with business groups and their tax advisers to re-fashion the fiscal regime and remove barriers to competitiveness.'
