A Scottish approach to taxation

The Royal Society of Edinburgh (RSE) welcomes the opportunity to submit evidence to the inquiry being undertaken by the Scottish Parliament’s Finance Committee into A Scottish Approach to Taxation.

In response outlines the principles which should underlie a good tax system, and argues that the devolution of powers over taxation to Holyrood presents an important opportunity for the Scottish Government to introduce an improved method of developing tax policy.

RSE Scottish approach to taxation (234KB, PDF)

Introduction

Through the Scotland Act 2012, the Scottish Parliament gained the ability to raise or lower Income Tax equally across all tax bands by 10p in the pound. It also gained competency over that was then Stamp Duty and Landfill Tax.

The subsequent Scotland Act 2016 extended Holyrood’s remit to give it the power to set rates and bands on non-savings and non-dividend income, in addition to devolving control of other taxes such as Air Passenger Duty and Aggregates Levy. From April 2017 the Scottish Government will be assigned half of the VAT
receipts estimated as arising in Scotland.

Over the past several years, the RSE has actively and consistently engaged with government, parliament and other interested bodies around issues of fiscal responsibility, taxation and the devolution of powers. In doing so, we have produced various Advice Papers to which we would draw the attention of the Committee:

• Air Passenger Duty (June 2016)
• The Scottish Fiscal Commission (November 2016)
• Competitive and Fair Taxation in Scotland (July 2015)
• cotland’s Fiscal Framework (April 2015)

This response was prepared using the expertise of a Working Group of RSE Fellows from a wide range of institutions and with diverse backgrounds

Download this policy advice paper

RSE Scottish approach to taxation (234KB, PDF)