Details of the proposed devolved financial powers, in response to the Silk Commission’s recommendations on financial devolution, include the ability to create new taxes with the UK government’s agreement and some borrowing powers.
Thirty of the 31 recommendations made by the Commission have been accepted in full or in part.
In a joint announcement from both governments today, it was also proposed that landfill tax and stamp duty land tax in Wales be devolved to ensure the Welsh government has an independent funding stream to pay back the money it borrows, and that the Welsh assembly will be able to hold a referendum on whether some of their income tax should be devolved.
Announcing the plans, chief secretary to the Treasury Danny Alexander said, "The package of financial powers we have published today will be a powerful tool, bringing greater financial accountability and transparency to the Welsh government. This is a good outcome for Wales."
The secretary of state for Wales, David Jones said, “The government believes in devolution and we’re determined to deliver. Accepting the Silk Commission’s key recommendations on financial devolution strikes the right balance and marks an important step in Wales’ devolution journey.
"These new powers will make for more accountable government for the Welsh people. It is now up to the Welsh government to seize this once in a generation opportunity - to drive forward Wales’ economic development, and to use this opportunity to secure the growth and prosperity that Wales so desperately needs."
In its first report last year, the cross-party Silk Commission said that corporation tax should not be devolved unless similar decision-making powers are given to Northern Ireland and Scotland.
Commission chairman Paul Silk said that he “firmly believes” the recommendations would benefit Wales and strengthen its “democracy and economy”.