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The Treasury Committee has launched an inquiry into the underlying principles of UK tax policy.
The move follows a number of recent reports that highlighted the shortcomings of the country’s fiscal set-up and the changes necessary. The Institute of Economic Affairs, a rightwing thinktank, last week called on the Government to 'substantially simplify the welfare system' through the introduction of a 'negative income tax'.
Earlier this month, the Institute for Fiscal Studies' Mirrlees Review argued that the country's means of taxation requires a radical overhaul if it is to become equitable and efficient – and the Office for Tax Simplification highlighted more than 1,000 available tax reliefs to be evaluated for effectiveness and relevance.
Finally, a paper from the Organisation for Economic Cooperation and Development claimed a tax system should distort economic incentives as little as possible and added, ‘Corporate taxes are the most harmful type of tax for economic growth, followed by personal income taxes and then consumption taxes, with recurrent taxes on immovable property being the least harmful tax.’
In its own scrutiny of tax policy, the Treasury Committee is inviting written submissions on the following points:
- What are the key principles that should underlie tax policy?
- How can it best support growth?
- To what extent should the tax system be structured to support other specific policy goals?
- How much account should be taken of the ease and efficiency with which a particular tax can be imposed and collected?
- Are there aspects of the current tax system that are particularly distorting?
Evidence of no more than 3,000 words should be original work, not previously published or circulated elsewhere. It must be presented in Word or rich text format, not PDF, and sent by email no later than noon on Friday 14 January 2011, with a body that includes a contact name, telephone number and postal address.
Further guidance on submissions is available on the parliamentary website.
