The Silk Commission provides a very thorough and logical review of the funding of the Welsh Government according to ICAEW. Commenting on the report, ICAEW Director for Wales, David Lermon, said:
“We agree with the need to make the Welsh Government more accountable to the electorate and believe that the recommendations to devolve Business Rates and some of the geographical based taxes are sensible in the context of enabling the Welsh Government to gain borrowing powers.
“ICAEW is more cautious about the recommendations relating to the partial devolution of income tax. While we appreciate that the proposals mirror those that have already been introduced in relation to Scotland, such complicated proposals have yet to be tested in practice. They will inevitably introduce greater complexity and bureaucracy into the UK tax system, two qualities that the tax system already has in abundance. Given that HMRC already struggles to administer the tax system effectively, such a major upheaval to the income tax system is likely to prove challenging unless further resources are made available to ease any transition to such a system.
“We fully support the call for the establishment of a Welsh Treasury to bring a much greater degree of financial control and insight into the work of the Welsh Government.”
The Report is the most important document on the funding of devolved Government in Wales since devolution and ICAEW looks forward to being fully involved in the discussions that will arise from detailed consideration of the Report’s recommendations.
