Welsh Tax System Under Consideration

22 - 11 - 2012

The government is to ‘seriously consider’ a report recommending that Wales should have its own tax system. 

The Silk Commission’s report calls for the Welsh government to have the power to vary income tax from 2020. It says that a referendum should be held and, if voters agree, both governments should share responsibility for income tax. The report also recommends that control over a range of smaller taxes should be devolved.
Welsh Secretary David Jones said both Whitehall and Cardiff would start analysing the report straight away to decide which, if any, of the proposals would be taken forward.
Since 1999 the Welsh government has relied on an annual block grant from the Treasury but if these changes were to go ahead, the Welsh government would be responsible for raising a quarter of its own budget.
‘Music to my ears’
Plaid Cymru AM Lord Dafydd Elis-Thomas hailed parts of the report as ‘music to my ears’.
He said it begins to put Wales in an international context and points out that Wales is the only devolved administration that does not have ‘proper tax varying powers’.

‘This is the first time that all the fiscal aspects, that is, everything to do with finance of devolution have been properly studied,’ he said.

‘Trapped in a state of perpetual adolescence’

However, Professor Richard Wyn Jones, director of the Wales Governance Centre, accused the commissioners of building a ‘set of hurdles in the way of the actual transfer of such powers that are so formidable that it is nigh on impossible to imagine the political circumstances in which such a transfer might actually take place’.

He predicts that some limited tax powers will be transferred but that Welsh political and economic life would ‘trapped in a state of perpetual adolescence’.

‘Significant and historic’
The Commission’s chairman Paul Silk described the report as ‘significant and historic’ for Wales.






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