The committee has asked for written evidence in a number of areas as it seeks to gather information about the “principles which should underpin the tax system.”
In announcing the inquiry, the cross-party committee of MPs, noted recent reports from the OECD and UK Institute of Fiscal Studies (IFS) into the same subject.
A statement from the committee highlighted that the OECD’s report found the tax system should distort economic incentives as little as possible and that "corporate taxes are the most harmful type of tax for economic growth, followed by personal income taxes and then consumption taxes, with recurrent taxes on immovable property being the least harmful tax."
The IFS study, meanwhile, argued in favour of a neutral tax system that should be “considered as a whole within the benefits system and achieve progressivity as efficiently as possible.”
The Treasury Committee also noted that the UK Office for Tax Simplification recently reported there were more than 1,000 tax reliefs in the UK, many of which are likely to be scrapped as a result of a review of the system.
The committee is seeking evidence in the following areas:
- 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?
