Welsh Tax Powers Are Unrealistic

January 15, 2014 Taxation in UK

Welsh Tax Powers Are UnrealisticCARDIFF – Wales’s may not be granted tax setting powers in the near future, as the current proposal is flawed and filled with shortcomings.

The tax setting power which may be granted to the government of Wales by the government of the UK are restricted, unusable and would have little positive effect on the country, according to a statement made on January 14th to the Welsh Affairs Select Committee by Gerald Holtham, a prominent economist and an adviser to the Welsh government.

The Committee is currently charged with evaluating the current draft of the Wales Bill, which was originally introduced in December 2013 to provide Wales with some independent borrowing powers, and the ability to set a portion of its taxes, including income tax, stamp duties and landfill taxes.

Before coming into effect the proposed changes would also need to be approved in a nationwide referendum.

In his assessment Gerald Holtham claimed that the power to collect stamp duties and landfill taxes are insignificant, as they only raise a cumulative amount of GBP 200 million per year, out of a national budget of approximately GBP 15 billion.

He also pointed out that the ability to set income taxes is also impractical, as raising taxes beyond the current level would likely result in lowered tax revenues because wealthy individuals would choose to leave Wales.

Gerald Holtham also pointed out that the powers planned to be transferred to Wales are significantly more restricted than those being given to Scotland, and added that “…the British government takes the view that Wales can’t possibly have anything it hasn’t already given to Scotland. We are the runt of the litter.”

Photo by: National Assembly for Wales