21 November 2003
The proportion of funding raised through council tax should be decreased and other regimes such as local income tax considered to run alongside it, CIPFA said this week.
In its response to the Balance of Funding Review, the institute said council tax had reached levels that had 'exceeded the acceptability of such a tax'.
Despite this, CIPFA gave its support to retaining council tax, adding that a proportion of tax raised nationally should come from a property tax. However, it argued that there was an over-reliance on council tax and it should be reduced.
To run alongside it and to plug any gaps from such a reduction, the institute recommends exploring other options, such as a local income tax or sales tax.
The institute also urges the review to examine the business community's contribution to local taxation. Its paper points out that business rates have been pegged to inflation-only increases since 1990 while council tax payers have seen their contributions rise well above inflation.
'CIPFA suggests the consequences and equity of the policy should be re-examined,' its paper states. It also argues for the return of the non-domestic business rate to local control.
PFnov2003
