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*New* @instituteforgov report out today, ‘Overcoming the Barriers to Tax Reform’ from @gemmatetlow, @tompope0, @jillongovt, @sukh_ss (and me).
https://www.instituteforgovernment.org.uk/publications/overcoming-barriers-tax-reform
#ifgtax #taxreform
https://www.instituteforgovernment.org.uk/publications/overcoming-barriers-tax-reform
#ifgtax #taxreform
In 2017, the @instituteforgov, with @TheIFS and @CIOTNews published Better Budgets, a report recommending reforms to improve how new tax policy is made. ‘Overcoming the barriers to reform’ examines how to improve the existing tax system. https://www.instituteforgovernment.org.uk/sites/default/files/publications/Better_Budgets_report_WEB.pdf
As our Taxing Times report showed, the UK tax system is beset with inefficiencies and unnecessary distortions. Behavioural and economic trends risk undermining revenues, while an ageing population is increasing pressure on public services http://www.instituteforgovernment.org.uk/publications/taxing-times-need-reform-uk-tax-system
Coronavirus will add to these fiscal pressures. The government’s economic rescue package will add £billions to public debt and may create public desire for a permanently larger state, more resilient public services and more generous welfare. Tax reform will be even more critical.
But public support for more spending on public services ≠ automatic support for tax reform. Successive governments have struggled to reform or raise taxes, instead choosing to tinker with the existing system while failing to address the underlying problems.
That needs to change – and government should seize the chance to do so. The coronavirus epidemic will accentuate existing problems – but may also bring public support for tax reform, offering government a rare opportunity to make sweeping changes. https://www.instituteforgovernment.org.uk/blog/coronavirus-tax-reform
Based on over 70 interviews with former ministers, current and former civil servants, journalists, tax experts and others – and drawing on experience from the UK and other similar countries – the report highlights the barriers to reform and identifies ways to overcome them:
A)The prime minister and chancellor must set clear objectives for tax system to help persuade public of need for reform, allow civil servants to focus on government’s priorities and allow MPs to hold the government to account.
B)The government should establish a tax commission to generate public discussion about problems with current tax system, possible reforms and how the state should be funded after coronavirus.
C) @hmtreasury should publish more evidence, consult on tax policy earlier and more often and potentially making greater use of the Office of Tax Simplification.
D) @hmtreasury and @HMRCgovuk should evaluate tax policy and tax reliefs more systematically and improve access to administrative tax data for external researchers
E)The @CommonsTreasury Committee should spend more time looking at the tax system and holding the government to account for the long-term sustainability of tax policy. The TSC chair should act as a vocal advocate for tax reform.
To find out more about our work on better tax policy and read transcripts of our interviews with former ministers and civil servants, visit our website https://www.instituteforgovernment.org.uk/our-work/policy-making/better-tax-policy
