South Wales East AM Mohammad Asghar has written his latest Argus column:

THE National Assembly recently debated the devolution of income tax powers to Wales.

The devolution of powers to vary income tax in Wales from this April represents a significant milestone in the devolution process.

It also presents a huge opportunity to radically change our economic environment.

Government has no money of its own.

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Every penny that government spends comes from the taxpayer.

By allowing people to keep more of the money they earn, you allow them to make their own spending decisions.

Low tax economies are the most successful economies.

Cutting taxes boosts the economy, increases economic growth and delivers higher living standards.

Wales cannot afford a tax system that acts as a barrier to economic growth and aspiration.

An increased tax burden on Welsh taxpayers increases the risk that it will restrain economic growth and cost jobs.

In its 2016 election manifesto, the Welsh Government made a commitment not to increase Welsh rates of income tax during this Assembly term.

However, they have stated that they will carefully consider tax rates to “ensure they continue to generate sufficient revenue”.

Just three months ago, the new first minister said that he “will not move away from our manifesto commitment unless I’m compelled to do so, but I don’t rule out the possibility that circumstances could change in a way that do have that compelling impact.”

It is clear that Welsh Labour cannot be trusted to keep its manifesto pledges.

Make no mistake, any tax increase would be aimed at and hit earners in the basic tax bracket.

Most taxpayers in this situation would be forced to shoulder the burden of higher taxes.

We should not underestimate the effect increased tax will have on outward migration.

The Welsh Government backed report ‘Welsh Tax Base’ has acknowledged that there would likely be some behavioural response from taxpayers.

These include individuals seeking alternative jobs, changing the number of hours worked, and migration out of Wales.

The CBI in Wales has rightly recognised that “raising Welsh income tax should be a last resort, and not a first response.”

The Welsh Government must come clear on this issue, confirm its election manifesto promise and state clearly that income taxes will not increase during the term of this Assembly.