Parliamentary Committees and Public Enquiries
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Government responds to Treasury Committee’s Tax After Coronavirus report

The Treasury Committee published its report on Tax After Coronavirus on 1 March 2021.

Its recommendations included:

  • Now is not the time for tax rises or fiscal consolidation, but significant fiscal measures, including revenue raising, will probably be needed in the future
  • Government’s tax lock manifesto commitment will come under significant pressure
  • Moderate increase in corporation tax could raise revenue without damaging growth
  • Government should prioritise reforming stamp duty land tax
  • Government should introduce temporary three-year loss carry-back for trading losses and increase investment incentives for business

The Committee has now received the Government’s response, which is published with this report. In reply, the Committee has expressed its disappointment that some of its recommendations, particularly around strategy, have been dismissed without a full explanation:

  • The Committee disputes the Financial Secretary’s statement ‘that the balance of recommendations in the report leans away from measures that would help to repair the public finances in the coming years’, and is disappointed with this observation. The Committee recommended several significant revenue raising measures, many of which the Government has adopted.
  • The Government should provide a clearer explanation of why it cannot accept the Committee’s recommendations on the need for a tax strategy.

Commenting on the Government’s response, Mr Stride said:

“Our inquiry was a thorough look at the tax system and an appraisal of how it could be reformed to raise money and improve the economic efficiency of the tax system.

“Whilst the Committee does appreciate the difficulty in pre-announcing tax policy, it is disappointing that the Government has rejected our recommendations to improve the approach to tax strategy, when the evidence was overwhelmingly in favour.”

Channel website: http://www.parliament.uk/

Original article link: https://committees.parliament.uk/committee/158/treasury-committee/news/155576/government-responds-to-treasury-committees-tax-after-coronavirus-report/

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