A PROPOSED new law would amount to the most radical and progressive reforms of local government finances in the devolution era, the Senedd heard.
The Welsh Government has introduced the Local Government Finance bill which would reform business rates and lay the groundwork for sweeping council tax changes.
Rebecca Evans told the Senedd that the bill would address many of the limitations of local taxation systems in Wales.
The finance minister said the bill will establish a five-yearly cycle of revaluations for council tax, which is still based on property values from 2003.
Under the bill, ministers would have greater flexibility to set, create and make changes to council tax discounts in future.
But Ms Evans stressed that the 25 per cent single-person council tax discount will remain in place.
Sam Rowlands, the Conservatives’ shadow minister, raised concerns that other council tax discounts could be taken away.
The former Conwy council leader said: “I am concerned that this could lead Wales towards higher taxes through the back door, further increasing the burden on working people here.”
He also cautioned that the bill could water down the role of locally elected councillors.
While the bill includes a duty to put a national council tax reduction scheme in place, Ms Evans said councils will play an important role and continue to have local discretion.
Under the bill, property values for business rates – also known as non-domestic rates – would be revalued every three years rather than the current five.
Mr Rowlands cautioned that a move to three-yearly revaluations could reduce certainty.
Ms Evans said the business community has asked for more frequent revaluations.
She argued that three years strikes the right balance between certainty and ensuring that the taxbase is up to date.
Labour backbencher Mike Hedges welcomed measures in the bill to tackle tax avoidance, which results in £10 million to £20 million a year of lost money for local services.
Peredur Owen Griffiths raised concerns about a clause in the bill which removes a requirement for council tax changes to be published in local newspapers.
During plenary on Tuesday November 21, Ms Evans said she expects this part of the bill to be subject to scrutiny in the Senedd.
She explained that the bill replaces the requirement in the Local Government Finance Act 1992 with a duty to place a notice of tax changes on a council website.
The finance minister stressed that the bill includes a requirement to put suitable alternatives in place to ensure information is accessible to digitally excluded people.
The bill will now be scrutinised by the Senedd’s local government committee, which will take evidence before publishing a ‘stage-one’ report by March 2024.
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