A tax system that needs to be clearer
Wednesday 13 December 1995
However, although the project is undoubtedly far-ranging - it involves more than 40 people spending five years on a complete rewrite of the legislation - it is difficult to see what will be achieved from this alone, apart from a crystal award from the plain English campaigners.
The document and the supporting paper produced by the Revenue form just one part of a general push to reform the tax system. The latest development comes just a few weeks after the Tax Law Review Committee, which includes a seconded Revenue official among its membership of parliamentarians, lawyers, academics and tax practitioners, came to much the same conclusion - that the tax system needed to be clearer if it was to be properly understood.
Meanwhile, Peter Wyman, a tax specialist at the accountants Coopers & Lybrand, has recently agreed to head a Department of Trade and Industry deregulation taskforce group which is looking at moving towards a merger of income tax and National Insurance.
What none of these manoeuvres deals with, however, is the growth in tax avoidance, which has become a booming industry despite the assertion that Britain's low rates of tax are a disincentive to spending a lot of money on tax advice. The complexity of the tax system is fertile soil for this blossoming profession.
The Revenue has got that front covered too, however. A consultation paper which was slipped out a few weeks ago is seeking views on whether Britain should follow the likes of Canada, Australia and New Zealand in introducing a general anti-avoidance provision.
Practitioners are convinced that such a measure - centred on the idea that transactions carried out solely for tax reasons are barred - is unworkable. But just because they have got their way on simplification does not mean their views will prevail on that issue too.
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