This report argues that the current tax policy making process is not fit for purpose: to reduce taxpayer confusion, cut down costly errors and avoid embarrassing U-turns, the Government must change the way it makes tax and budget decisions.
Published by the Chartered Institute of Taxation (CIOT), Institute for Fiscal Studies (IFS) and Institute for Government (IfG), the Better Budgets report outlines ten steps toward making better tax policy.
Welcoming the announced move to a single Budget each year – an interim recommendation from the three institutes in September 2016 – the report recommendations include:
- Publish clear guiding principles and priorities for tax policy: governments frequently give little sense of direction on tax policy making planning difficult
- Improve consultation, in particular ensuring that consultations happen before key decisions have been made
- Use external, public reviews of aspects of the tax system as a means of opening up public debate.
The report authors say that Treasury needs a more robust policy making process, involving more challenge before measures make it into the Budget speech. And Parliament needs to improve the quality of its scrutiny of both the Chancellor’s proposals and of the impacts of measures once implemented.
Taken together, these changes would mean fewer, better-designed measures and a more coherent tax system commanding wider public support.