Welsh officials are sooooo happy. On Sept. 12, lawmakers in Wales introduced the country's first homegrown tax in 800 years, finally, as a new government fact sheet says, producing "Taxes made in Wales for Wales."
We'll see how long that excitement lasts.
I will, however, cut the people of Wales some slack. It's been almost 800 years since the nation in western Great Britain has had control over its tax system.
Wales' ability to legislate and levy tax was granted by the passage on Sept. 7 of the Wales Bill by the UK House of Commons. Under the new law, Wales could raise a fifth of its budget by 2020. The Welsh National Assembly also will be able to set its own rate of income tax.
Wales land tax on the distant horizon: So what's first on the reinvigorated Welsh tax books? The nation's first tax law in centuries is essentially a property tax.
Wales' Land Transaction Tax will be payable on the purchase or lease of a building or land within the country's borders that exceeds a certain price. It will replace the existing stamp duty land tax.
The new property transfer tax will affect home buyers and businesses, including builders, property developers, lawyers who specialize in buying and selling property and businesses renting premises.
It won't take effect, however, until April 2018. Although it was introduced this week, it's not expected to receive Royal Assent in summer 2017. It does take, after all, a while for one country to hand over such important fiscal duties to another.
2018 also will be the year when Wales sets the actual land tax rate to, according to Welsh officials, "reflect economic conditions at that time."
And while a year and a half is a bit of a wait, in the larger scheme of the Wales and United Kingdom relationship, it's nothing.
When Wales' land transaction tax finally takes effect, it will be the first locally administered levy since Wales was conquered by the English King Edward I in the late 13th century.
Landfill tax next: After the land transaction tax, the Welsh National Assembly plans to tackle the Landfill Disposals Tax.
Wales' tax officials say that, like the existing landfill tax, the new landfill disposals tax will be designed to reduce the amount of waste being sent to garbage dumps and encourage greater reuse, recycling and recovery of waste.
Some of the landfill tax collections will support local community and environmental projects in areas impacted by the disposal of waste to landfill.
Wales' specific landfill disposals tax bill will be introduced later this year and, like the land transaction tax, get official UK approval next summer. The landfill tax also will take effect in the spring of 2018.
Local control lauded: Mark Drakeford, Wales' finance secretary, described it as "a historic milestone" in the devolution of tax powers to Wales creating "taxes which are more suited to the needs of Wales and Welsh public services."
That phrase echoes the official language of the Welsh tax office.
A fact sheet on the impending new taxing authority says that it will provide the country "with the opportunity to reshape existing taxes to better meet Wales' needs."
To do that, Welsh officials say all new taxes will be designed according to four key principles:
- Be fair to people and businesses who pay taxes.
- Be simple with clear rules.
- Support public services, growth and jobs, which will help tackle poverty.
- Provide stability and certainty.
Those are worthy goals to which taxing authorities worldwide should adhere.
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