At the launch of the OTS, the Chancellor, George Osborne described the UK's 11,000 page tax code as "one of the most complex and opaque" in the world. He introduced the OTS as a "permanent body to push against the forces of complication" so that people "might actually understand the tax laws with which they are being asked to comply".
Michael Jack, the former Treasury minister, will head up the OTS and will be helped by leading figures drawn from the tax and legal professions. As well as examining the existing tax laws, the OTS will consult with various stakeholders on how best to reduce the complexity of the regulations.
Mr Jack commented: "Entrepreneurship should never be stifled because of an overly complex tax system. That's why I am delighted that the government have committed themselves to looking at ways to simplify the tax system, with an initial focus on small businesses.
"Simplification in a complex world is a real challenge but it's one that has to be addressed if the tax system is not to hinder the economy's ability to grow."
The OTS will produce an interim report by late autumn 2010 and a final report, with recommendations, to the Chancellor ahead of the 2011 Budget.