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MPs launch tax policy inquiry

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The Treasury Committee has launched an inquiry into the principles which should underpin the UK tax policy, a fortnight after the Office for Tax Simplification revealed that the system has more than 1,000 reliefs.

The Committee has invited written evidence by 12 noon on 14 January 2011 on five questions:

  • What are the key principles which should underlie tax policy?
  • How can tax policy best support growth?
  • To what extent should the tax system be structured to support other specific policy goals?
  • How much account should be taken of the ease and efficiency with which a particular tax can be imposed and collected?
  • Are there aspects of the current tax system which are particularly distorting?

The Committee observed that the recent Mirrlees Review argued that the system ‘should be considered as a whole with the benefit system, seek neutrality, and achieve progressivity as efficiently as possible’, while the OECD reported that the system should distort economic incentives as little as possible and that ‘corporate taxes are the most harmful type of tax for economic growth’.

The Treasury Committee announced a month ago that it was launching an inquiry into HMRC’s administration and effectiveness.