Scottish income tax rates agreed for the year ahead

Last Thursday the Scottish Rate Resolution was agreed by 86 votes to 27, with the Scottish Conservatives opposing the plans. It meant were MSPs were able to agree the Scottish Budget on Tuesday.

In opening remarks, Finance Secretary Shona Robison reiterated the government’s commitment to a ‘fair and progressive’ income tax policy. She was critical of plans by the Conservatives and Labour to cut taxes, the latter having announced last week it would bring the higher rate threshold back into line with the rest of the UK (see below).

Craig Hoy (Conservative) accused the government of hiding from ‘mounting evidence’ of behavioural change as taxpayers respond to the impact of income tax divergence. He said that factors including working less, retiring early or moving away from Scotland were all a ‘direct consequence of the SNP’s high tax regime’.

Michael Marra (Labour) said the ‘lions share’ of the coming year’s budget (‘the largest since devolution’) was the result of decisions taken by his Labour colleagues in the UK Government. He defended his party’s new policy for higher rate taxpayers, saying it was an ‘entirely legitimate aspiration’ to alleviate the tax burden of those earning between £43.663 and £50,270.

Ross Greer (Green) said he was proud of Scotland having the ‘most progressive’ income tax regime in the UK but urged MSPs to turn their attention towards wealth taxes as a means of raising further revenues. He focused much of his comments on council tax reform, describing the system as ‘broken’ and ‘out of date’ and called for a revaluation to take place before next year’s Scottish Parliament election.

And Willie Rennie (Lib Dem) claimed that recent Scottish Government tax rises had broken trust and created uncertainty, posing a threat to the Scottish tax base.

The full debate can be found here.