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Government must 'change way tax and budget decisions are made', report urges

23 Jan 2017

In a recently published report, the Institute for Fiscal Studies (IFS), the Chartered Institute of Taxation (CIOT) and the Institute for Government (IfG) have called for the government to change the way it makes tax and budget decisions.

The report comes following the 2016 publication of an open letter to Chancellor Philip Hammond, in which the three organisations called for significant changes to be made to the UK’s tax system in order to ‘simplify the making of tax policy’.

It outlines the need to publish ‘clear guiding principles and priorities’ for tax policy, and to improve consultation, ensuring that consultations occur before key decisions are made.  

The institutes also called for the implementation of a more robust policy-making process, and for decisions to be challenged before they are incorporated into the Budget speech.

The report did, however, welcome the Chancellor’s announcement to move to a single Budget each year.

Paul Johnson, Director of the IFS, commented: ‘Tax policy is too important to leave to the Chancellor alone. We need a more open policy-making process as a route to a better tax system.

‘The lack of any explicit tax strategy allows policy to be made on the hoof and makes it harder to engage the public in a much needed rational debate about tax.’

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