Scottish Government
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Scottish taxes to be determined by the people of Scotland

Decisions about the future of Scotland’s taxes should be made by the people of Scotland  Finance Secretary John Swinney said yesterday.

The passage of the Scotland Act 2012 means that from April 2015 the Scottish Parliament will be empowered to introduce and manage taxes on the purchase or leasing of land and buildings and the disposal of waste to landfill.

In a statement to Parliament, Mr Swinney outlined Scottish Government plans to make full use of these powers to introduce two replacement taxes which would be embedded in Scots law, reflect Scottish values and Scottish circumstances.

He launched the consultation for the first of these taxes: the Land and Buildings Transaction Tax to replace Stamp Duty Land Tax. The proposals include changing the structure of the tax to a progressive system where the amount of tax paid is more closely related to the value of the property. Two further consultations will be issued before the end of 2012.

Mr Swinney also outlined his plans to establish Revenue Scotland, a small and efficient body which will work with Registers of Scotland and the Scottish Environmental Protection Agency to ensure the collection and administration of the taxes at a lower cost than that proposed by Her Majesty’s Revenue and Customs (HMRC).

Speaking at the Scottish Parliament, Mr Swinney said:

“Today we have taken the first step towards the setting and collecting of taxes in Scotland and to doing so better and at less cost than the UK Government.

“In setting up Revenue Scotland we are developing an innovative approach to taxation, working with existing organisations, to deliver Scottish taxes, set by this Scottish Parliament and to save the Scottish taxpayer money. These proposals will save at least 25 per cent of the cost of asking HMRC to administer these taxes. This is an example of the advances that could be made if Scotland had the powers to determine its own future.

“The Government’s approach to taxation is founded on Scottish principles that have stood the test of time. Adam Smith’s four maxims with regard to taxes; the burden proportionate to the ability to pay, certainty for the taxpayer, convenience and efficiency of collection were defined in 1776. They provide the basis for a system that will meet the needs of a modern, twenty-first century Scotland, grounded on solid foundations. To those four principles this government will add our core purpose of delivering sustainable economic growth and meeting the distinctive needs of Scotland.

“In today’s consultation on the proposed Land and Building Transaction Tax we have signalled our preference for a  progressive system of taxation where the amount of tax paid is more closely related to the value of the property and therefore to the ability of the individual to pay.  At the same time our consultation also indicates a willingness to adjust the threshold at which taxation is levied in order to support those at the lower end of the market. 

“To ensure that the views of the taxpayer and expert communities remain embedded in the development of our approach to taxation, we will also establish a Tax Consultation Forum to which representative bodies, networks and organisations with an interest in the tax system can contribute. This will complement our formal consultation structures.

“The approach I am outlining represents a strong foundation for the future. However, the case for the responsibility for taxation in Scotland resting with this parliament is compelling.  Only in an independent Scotland, where Scotland has full control over all economic levers, will the interests of Scotland be best served.”

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