Parliament should be doing more to scrutinise the government's tax policies, a leading think tank has said.

The Institute of Fiscal Studies said that with the British tax system becoming ever more complicated, the Commons should be tougher and more thorough in holding Gordon Brown's Treasury to account.

The report, by a working party of the IFS's tax law review committee, set out six key recommendations to improve the ways in which parliament deals with tax proposals and legislation.

These include the creation of a select committee on taxation and more time set aside for MPs to debate the pre-Budget report.

Chaired by Sir Alan Budd, a former chief economic adviser to the Treasury, the working party called on MPs to improve the accountability, transparency and simplicity of parliaments' tax changing powers.

Parliament must involve itself at an earlier stage in the process of examining the government's tax proposals and legislation, the committee said.

The report builds on the recommendations of the House of Commons' modernisation select committee, which has also urged improved scrutiny of the way economic policy decisions are pushed through parliament.

The annual Finance Act collates all tax changes required by the chancellor that cannot be covered by statutory instruments.

It rarely faces any amendments or difficulty in its passage through parliament.

Another recommendation in the report was for parliamentary pre-legislative scrutiny of tax proposals "once they have moved beyond the drawing board and government has decided to implement them".

There should also be changes to ensure that parliament is always given "the time and the means to consider the tax proposals" that the government intends in to ask MPs to endorse in Finance Act.