The coalition government has not done enough to set out the principles underlying its new approach to tax policy making and would benefit from more direct input from tax experts, according to a House of Commons report.
The Commons Treasury select committee this week reported on the evidence gathered at recent hearings into tax policy.
Noting “a surprising degree of convergence” from the evidence presented, committee chairman Andrew Tyrie advanced a set of principles (see below) that point “a direction of travel” towards a tax system that would secure consent and improve the performance of the economy.
Tax policy principles
According to the MPs, tax policy should:
- be fair to ensure that it commanded consent
- support growth and encourage competition
- provide certainty. “It should not normally be necessary for anyone to resort to the courts in order to resolve how the rules operate in relation to his or her tax affairs.”
- provide stability. Changes to the underlying rules should be kept to a minimum and policy shocks avoided.
- be straightforward and practical: a person should be able calculate their liability, and it should be easy to collect.
- be coherent.
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.