From 2014 , around 20m taxpayers will receive a Personal Tax Statement from HMRC, setting out exactly how much income tax and national insurance contributions they pay and detailing where the money goes.
It will also set out their average annual tax rates and how this contributes to public spending.
The plan is the brainchild of Ben Gummer, a rising star of the Tory backbenches and the son of the former cabinet minister John Gummer.
Chancellor George Osborne said he wanted a “simple and transparent” tax system.
“In the information age people should know what tax they're paying and what their money is being spent on. The idea was introduced by my Right Honorable from Ipswich and I think it's an excellent idea and I intend to put it into practice,” Osborne explained.