A TAX law expert has warned that controversial internal market proposals could give UK ministers a licence to “interfere with the tax devolution settlement”.
Most tax powers are held by the UK Government but MSPs have been told that “tax breaks” in one part of the UK could be used as an excuse to meddle in devolved areas of taxation.
Dr Dominic de Cogan from the Centre for Tax Law at Cambridge University, issued the warning to Holyrood’s finance and constituin committee.
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He said: “When I first read the bill, I though that tax was excluded from the entire bill. But in fact, I can’t see any exclusion for clause 48 and indeed in the government white paper they mentioned a tax break as something that might constitute a distort of a harmful subsidy.
“I just wonder if this is an opportunity, perhaps, for the Westminster parliament to interfere with the tax devolution settlement by saying you might be giving this business rates break or you may have plans to develop your tax system in this particular way, but in fac that may constitute a distort of a harmful subsidy. As it’s a reserved matter, we now have a degree of control over that.”
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SNP MSP Tom Arthur said: “The Scottish Government has consistently demonstrated an approach to taxation that is fair, progressive and promotes sustainable economic growth - using resources raised through tax decisions to support our vital public services.
“A majority of Scottish businesses benefit from the lowest poundage anywhere in the UK and a number of tax incentives that only exist in Scotland. All of that is being threatened by this Tory government.”
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He added: “It is clear that the main purpose of the bill is to take powers away from the devolved governments and reserve them to Westminster - but attempting to take control over Scotland’s democratic spending decisions would be a constitutional outrage.
“Control over the Scottish Parliament’s spending decisions must be made in Holyrood - not dictated by a reckless Tory government in Westminster that is acting against Scotland's interests.”
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