Will the Minister indicate how much revenue the Welsh Government estimates would be raised by the following increases across all bands from income tax in Wales: 1 per cent; 2 per cent; and 3 per cent?
The static impact of increasing the Welsh Rates of Income Tax is shown in the table. This is based on the forecast for 2020-21 published on 16 December 2019 by the Office for Budget Responsibility in its Welsh Taxes Outlook. This static analysis does not take account of any behavioural impact on the income tax base arising from increasing the tax rates. These behavioural impacts would reduce the additional revenues relative to those shown in the table. The estimated impact on revenues from behavioural effects would be included in the Office for Budget Responsibility’s forecasts if the Welsh Government were to change the Welsh Rates of Income Tax.
Static impact of increasing the Welsh Rates of Income Tax (£ million)
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Increase in income tax rate: |
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1p |
2p |
3p |
|
Basic rate |
190 |
381 |
571 |
|
Higher rate |
25 |
49 |
74 |
|
Additional rate |
6 |
11 |
17 |
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Total |
221 |
441 |
662 |
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