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This report reviews international literature and presents qualitative interviews to assess the practicalities of local income tax as a replacement for council tax in Wales.

International literature on local income tax

A locally administered income tax for Wales would be a unique system. This is because there is no international example of local taxation with the same financial set up to Wales.

Challenges to implementing a local income tax in Wales

Several challenges are presented that do not presently have solutions.

A key challenge would be deciding how to define ability to pay. Many aspects of implementing a local income tax would require significant changes to current provision and existing skills in local authorities. Therefore, it is key that Local Authorities are involved in the design process.

Benefits to a local income tax

One key benefit may be the ability to embed ability to pay into the design of council tax. This is achieved to some extent through the current reactive discounts, exemptions and reduction schemes, but only for the lowest earners.


An assessment of the feasibility of a local income tax to replace council tax in Wales , file type: PDF, file size: 1 MB

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John Broomfield

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