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Developing new taxes in Wales

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The Welsh Government will propose a vacant land tax to the UK government to test the Wales Act 2014 powers.

In October 2017, the Cabinet Secretary for Finance announced 4 tax ideas that the Welsh Government would develop further in the coming months: a social care levy, a vacant land tax, a disposable plastics tax, and a tourism tax.

While vacant land tax proposal has been prioritised to test the Wales Act powers, work will continue, at varying levels, on the remaining 3.

A poll about the shortlisted ideas for a new Welsh tax was made available via social media by the Welsh Government between 6 November 2017 and 5 December 2017. The outcome of the poll is available below.

Source: doopoll

New tax ideas

Vacant land tax

Wales needs more housing. Sometimes, land identified as suitable for building is not built on, or is not built on as quickly as needed. This idea will explore whether a new tax to increase the cost of holding vacant land could encourage the building of new homes and increase commercial development.

The Welsh Government will take this idea forward in 2018 to test the Wales Act 2014 new tax powers. More detail on the process is available in the document download below.

We will work with people who own or develop land, house builders, local planning authorities, housing associations, and the third sector to ensure the new tax would help build the houses and commercial buildings we need.

Social care levy

Wales has a growing number of older people. We need to consider new and innovative ways of providing social care into the future.

We will explore various options for how we contribute towards paying for the care that we may need later in life. Professor Gerald Holtham has been commissioned to consider further his idea of a levy to fund social care in Wales in future. His final report Paying for social care is available below.

Further work will be undertaken to consider various options to help fund social care in Wales in the long term and Professor Gerald Holtham’s report will inform the work of a new inter-ministerial group on social care, chaired by the Minister for Children, Older People and Social Care.

Disposable plastic tax

We all know the things we use everyday can affect the world we live in. Small changes can have a big impact on our behaviour and our environment.

This idea considers if a tax could change behaviour towards disposable plastic and a range of options will be explored.

The UK government’s call for evidence concluded on 18 May 2018. We are working with UK government to assess the responses to inform our approach.

We are exploring a Welsh tax on disposable single use cups to reduce their use, encourage re-use, and reduce the litter they can create..

Tourism tax

Wales is a popular tourist destination. This tax idea explores how a small contribution from those visiting could help sustain services which are important to both visitors and the local community. The tax raised could be used to pay for things which make places attractive such as tidy beaches, extra street cleaning and well maintained public toilets.

Further longer-term work will be undertaken to explore a local tourism tax.