WEST Dorset MP Oliver Letwin has reportedly hinted that plans for a flat tax rate could be discussed.
The Minister for Government Policy was recorded by a national newspaper saying that the flat rate tax policy may be discussed when the financial situation in the UK had improved.
But a Conservative spokesman has said that there will not be a flat tax rate and that they oppose the idea.
The flat tax rate system is one that applies the same tax rate to every taxpayer regardless of income bracket.
The same tax rate is applied to all taxpayers, with no deductions or exemptions allowed. Supporters of the system argue it is fairer it because it imposes the tax on all taxpayers regardless of income.
But detractors suggest it means lower taxes for the richest in society.
It has been reported that Mr Letwin was asked about a flat tax rate at an event by think-tank Politeia earlier this month.
In the taped recording, Mr Letwin allegedly says: “And it may well be we will see sufficiently increased investment to produce more revenue as the elasticity equation. And that is of course is the proposition that the flat tax proponents make about income tax.
“The difference is that on corporation tax this can be achieved within our fiscal envelope without taking any serious risks. Whereas its enormously complicated and a risk to business if we move to a flat tax regime in the hope that we get enough extra revenue to make up for the revenue you will certainly lose.
“And I’d like to draw your attention to the fact that in 2010, indeed now, we were not in a position to take a large fiscal cut.
“There may come a time when the situation is different and that discussion will no doubt open up at that point.”
The Echo approached Mr Letwin for a comment, he said: “As already quoted in the Daily Mirror, the Government's view is that ‘there will be no flat tax - we oppose it - full stop.”