7 September 2015
Vision and process in tax policy making: key ingredients for investment
As Parliament returns from Summer recess, and the first Finance Bill of the new Government makes its way through Parliament, the CBI is publishing this paper highlighting the importance of vision and process in tax policy making.
Check out our Business Tax Roadmap and read our white paper Vision and process in tax policy making: key ingredients for investment.
In its first 100 days in office, the CBI called on the new Government to commit to a Comprehensive Business Tax Roadmap to articulate the way ahead on business tax. The Government’s pledge in the Summer Budget to set out such a Roadmap in April 2016 was welcome. This paper highlights the importance of vision and process as the keys to effective tax policy making and investment in the UK. While a competitive tax system is important, so too is a clearly articulated vision and effective legislative process that promotes predictability, stability and simplicity. By working in tandem, a competitive tax system and an effective tax policy making process will give business the certainty to make long-term investment in the UK.
The Government’s pledge to publish a Business Tax Roadmap by April 2016 recognises that businesses want certainty over the direction of the tax system. The 2010 Corporate Tax Roadmap is expected to deliver £11bn of investment, and in making the UK more attractive for business the UK has create 85,000 new jobs by FDI projects in 2014/15.
While the competitiveness of the corporate tax regime has received welcome attention, we believe that it is right to review the full range of taxes facing business. Setting out a vision and sticking to it is often more powerful than an unexpected tax giveaway. We are calling on the Government to ensure the Roadmap is as comprehensive as possible, covering the full range of taxes affecting businesses and recognising the value businesses attach to predictability.
More time should be built into the enactment cycle, allowing better and more meaningful consultation, as well as greater scrutiny. Having two fiscal events a year does little to contribute to a predictable, stable or simple tax system so we are calling om the Government to recommit to its 2010 tax policy making principles to develop tax policy over a longer period of time. We’d also like to see a post-implementation review to ensure tax policies are meeting their original objectives.