TaxAdministrationTreasury dismisses tax policy role

Treasury dismisses tax policy role

The Treasury has formally washed its hands of responsibility for tax policy, in a clash with MPs on the Commons Treasury Committee, over the department's role within government.

A minute, responding to a committee report, insisted it was the Inland Revenue and Customs & Excise who ‘have lead responsibility for advice to ministers on policy in respect of the taxes they administer’.

This was in reply to CTC report, which said: ‘We firmly believe that in the area of tax policy the Treasury could do better.’

It continued: ‘We recommend that the Treasury give more attention to this area in order to ensure that the tax system is ‘fair and efficient’, one of the Treasury’s Public Service Agreement objectives.’

In response, the Treasury said Revenue and Customs are separate departments reporting to chancellor Gordon Brown and other Treasury ministers.

It said: ‘The Treasury works closely with the responsible departments but does not seek to duplicate their expertise.

‘Its role is to co-ordinate, to take an overview of tax policy, and to ensure consistency with other areas of Government policy.

‘Greater intervention by the Treasury in the details of the Revenue Departments’ policies would be inconsistent with the more strategic role for the Treasury which both the government and the committee support.’

Treasury committee MPs countered by saying there may be good reasons for Revenue departments retaining significant expertise in tax policy, ‘but we are convinced of the need for the Treasury to build up its own capacity to analyse detailed tax issues and to take a more strategic view of the tax system and of the impact of taxes on the economy than hitherto.’

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