Wales politics

Tax collection plans revealed by Welsh government

Jane Hutt examines old tax documents
Image caption Jane Hutt examined old tax documents from the National Library of Wales

Plans for how Wales will collect and manage its own taxes for the first time in 700 years have been revealed by Finance Minister Jane Hutt.

Powers over business rates, stamp duty land tax and landfill tax are being devolved to the Welsh government.

Ms Hutt announced a Welsh Revenue Authority, responsible for ensuring taxes are collected, would be created.

She said Wales would be able to "shape taxes which are better suited to Welsh circumstances and proposals".

The new taxes, due to begin in 2018, will be the first to be set and raised in Wales since the 13th Century.

The point was illustrated by National Library of Wales staff, who have been in Cardiff Bay with old tax documents to show the minister.

Laying out the Welsh tax raising plans, Ms Hutt said the principles are:

  • being fair to business and individuals
  • being simple
  • minimising compliance and administration costs
  • supporting growth and jobs
  • helping to tackle poverty
  • providing stability and certainty for taxpayers

There will also be a taxpayers charter, making clear the rights and responsibilities of both citizens and the authorities, she said.

Image caption National Library of Wales' documents from 1797 detailing a tax imposed on clocks and watches
Image caption Entertainments tax was paid at the 1918 National Eisteddfod

When asked what the costs of running the new tax system in Wales would be, the minister said those figures were still being worked on.

"The first step in the devolution of taxes today, I believe, is both historic and significant," Ms Hutt said.

"I'm encouraging people to bring forward their views to help us shape the development of our tax regime.

"I want people to engage with us, and tell us of their aspirations as we prepare the ground for this significant change in Wales' financial landscape."

The consultation runs until 15 December, with a bill due to be published next July.

Conservative Shadow Finance Minister Nick Ramsay said: "The Labour government's necessary proposals on tax collection must now be scrutinised in detail and I urge as many people as possible to have their say.

"We are the only party committed to scrapping stamp duty on all properties valued up to £250,000 and taking all small businesses out of business rates for good."

The Welsh government cannot currently vary taxes or borrow money, and instead gets its budget in a grant from the UK government.

Last November the Silk Commission - an inquiry set up by the UK government which recommended devolving more power to Cardiff Bay - said the Welsh government should be responsible for raising some of the money it spends.

It also included a recommendation to devolve powers to vary a portion of income tax by 2020, following a referendum.

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