2. Will the Cabinet Secretary make a statement on Welsh Government efforts to tackle any weaknesses in the tax system in Wales? OAQ51625

Well, may I thank Siân Gwenllian for that question? The Welsh Government is committed to exploring new approaches to deterring tax evasion, artificial avoidance and improving compliance across all the Welsh taxes, including local taxes and the new national taxes, which will be coming into force in April 2018.

I wanted to raise the issue of taxing holiday homes and second homes. Steffan Lewis and I sent you a letter before Christmas, noting concerns about the issue of second homes transferring into the holiday home category in order to avoid paying council tax. There are 500 properties that have been transferred from council tax to business tax in Wales, leading to a loss of over £1.7 million to the public purse. You responded by saying that some action had been taken in order to tackle the problem, but how confident are you that the rules that you have introduced into the system are going to tackle this problem in full? Doesn’t far more need to be done, if truth be told?

Well, Llywydd, may I thank Siân Gwenllian for the information that she has given to me and the correspondence that we’ve received from both her and Steffan Lewis? I have received advice from my own officials. At present, I believe that the rules are there in order to deal with the situation that Siân Gwenllian has outlined. We are not yet in a position where we can be confident about how things will turn out. I’ve replied, today, to the Member, after receiving her second letter, to tell her that, having considered her words, I have changed the new policy on the taxes that I will be publishing, hopefully, in February, in order to include this issue in the work programme and to do more over the years, working with the Valuation Office Agency and the local authorities. And, so, we shall see. Ultimately, if we see from the evidence that there is a big problem, then we will have to take action. However, if the current measures are robust enough to deal with the problem, the data that we'll be able to collect over the coming year will reflect that also.

Does the Cabinet Secretary agree with me on the importance of ensuring that all Welsh income tax payers are identified prior to income tax being partially devolved and that we don't want the same difficulties that occurred on income tax devolution in Scotland, where a number of people were misallocated? 

Well, this is a very important question and thanks to Mike Hedges for raising it. He is right to say that, when income tax responsibilities were devolved to Scotland, there were some teething troubles, which Her Majesty's Revenue and Customs experienced in correctly identifying those individuals who were now to be liable for Scottish rates of income tax. HMRC tell us that they have learnt through that experience that they are better placed to make sure that, as Welsh rates of income tax become a reality as of April of this year, they will be able to avoid some of the difficulties that they experienced first time round. There are advantages, as Members will know, in going second in some of these things. However, the executive who has primary responsibility for these matters at HMRC is coming to the Finance Committee on Wednesday of next week so that he can be scrutinised on these matters. I will be meeting him on the same day, and I will certainly be looking for further assurances from him that, as Welsh income tax responsibilities become a reality, HMRC will be able to deliver on their side of that bargain.