Income tax plans
Parties invited to share proposals.
Finance Secretary Derek Mackay has written to opposition parties asking for confirmation of their proposals for income tax policy in Scotland, in order for them to be included in a discussion paper as announced in the Programme for Government.
The paper will be published later this year, ahead of the 2018/19 draft budget.
Mr Mackay said:
“This is the start of a cross-party discussion around how we continue to fund high quality public services across Scotland, and I want to ensure that proposals from all parties are represented. This is a chance for the Scottish Parliament to have a serious debate about taxation and public services and I hope that all parties will participate constructively in that discussion.”
Full text of letter:
In the Programme for Government, announced on 5 September 2017, the Scottish Government committed to publish a discussion paper prior to the 2018/19 Draft Budget on the appropriate use of income tax powers in Scotland.
The paper will set out the current distribution of income tax liabilities in Scotland, analyse a variety of policy options, explain the interaction between tax policy and the fiscal framework, consider the trade-offs involved in making any proposed changes, any interactions with HMRC and the DWP and provide international comparisons.
It is the Scottish Government’s intention that the paper will inform discussions on taxation ahead of this year’s budget and may enable a consensus position to emerge.
To inform these discussions, and to provide the public and parliament with a clear understanding of the starting point for such a discussion, we intend to include your publicly stated tax positions in the paper. It is our intention to use the position your party put forward at the 2016 election and which you presented during last year’s budget negotiations. Where additional or alternative proposals were put forward in the 2017 election we would also include these, adjusted where necessary for the Scottish income distribution.
If your party’s income tax policy has changed since then, I would be grateful if you could notify us by Monday 25 September, providing your updated position.
Please also advise whether you would wish any income tax thresholds, such as the Higher Rate Threshold, in your stated position to be uprated with inflation for the coming year, frozen in cash terms at their current 2017-18 level or revert to levels applicable elsewhere in the UK. The income tax discussion paper will then set out how much additional revenue each proposal is expected to raise or cost in 2018-19 and how your proposal would impact on individual taxpayers compared to the income tax position agreed by parliament earlier this year.
I look forward to engaging with you following the publication of the discussion paper.