The Scottish Government must recognise its tax policy is not working and address divergence with the rest of the UK, the financial services industry has said.
Scottish Financial Enterprise (SFE) said rates should be brought more closely in line with those south of the border when Finance Secretary Kate Forbes delivers her Budget proposals on December 4.
The industry group referred to a recent report from the Institute for Fiscal Studies which said Scotland’s top rate of income tax may have slightly reduced revenues rather than increasing them.
The SFE said the Government should resist calls for further income tax rises.
Chief executive Sandy Begbie said: “SFE has consistently stressed the risk of income tax divergence shrinking the Scottish tax base.
“We have pursued an evidence-based approach on this issue which has now been vindicated by the Institute for Fiscal Studies."
READ MORE:
- Scottish councils call for 'widespread reform' of funding
- Glasgow City Council orders investigation into pension 'fixes'
- LibDems could abstain on SNP Budget allowing plans to pass
- Fears Glasgow CCTV may have impacted Buchanan bomb scare
Mr Begbie said: : “The Government must instead recognise that its divergence policy is not working and take action to begin changing course.
“We recognise that divergence cannot be unpicked overnight, but bringing even some income tax rates more closely in line with the rest of the UK would be a step in the right direction and a clear signal that the Scottish Government recognises the concerns of business and its ability to grow, invest and attract and retain talent.”
A Scottish Government spokesman said: “Scotland’s tax policies are grounded in evidence and carefully balance the need to raise revenue with the impacts on taxpayers and the economy.
“Our tax base continues to grow strongly, with data from the RTI PAYE system showing Scotland experienced faster earnings and tax per head growth than the rest of the UK in both 2022-23 and 2023-24.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel