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SNP’s local income tax is not local – devolve it to councils, says think tank

Reform Scotland calls for types and rates of local tax to be devolved to local authorities after SNP backs centrally-set local income tax

Reform Scotland, the independent think tank, has reiterated its call for local taxation to be devolved to local authorities following speculation that a centrally set local income tax would be introduced in an independent Scotland.

First Minister Alex Salmond confirmed last week that he still supports the introduction of a local income tax.

However the SNP’s vision is of a tax with a centrally-set rate, meaning that it is ‘local’ in name only. Effectively, it would be an addition to the nationwide income tax. This would be a continuation of the SNP’s trend towards centralisation, mirroring the freezing of council tax and the resultant removal of local accountability.

Reform Scotland calls for local authorities to raise the majority of what they spend.   The think tank believes that it should be up to each local authority to choose the type of local tax; whether that is a locally set income tax, a council tax, land value tax, or other system; as well as the rate and discounts applied.  This will enable each council to address the different needs and circumstances it faces.

Commenting, Reform Scotland’s Research Director Alison Payne said:

“There is nothing local about the SNP’s local income tax. The proposal is simply for a centralised tax which the government asks local authorities to collect. It gives local authorities no accountability whatsoever.

“In order for decisions to be made as close to people as possible, we must devolve to our councils complete power over local taxation.

“Councils will then be able to levy taxes which meet their unique needs. Some may choose a property-based tax such as council tax, some an income-based tax and others a sales tax. Some may combine all of these.

“That would be real local accountability, and real devolution.”

ENDS

NOTES TO EDITORS

1. Although the SNP has not provided futher details about its Local Income Tax, when the SNP tried to introduce a local income tax to replace council tax in its first term, it proposed a form of local income tax which involved a centrally set flat rate of 3 pence in the pound.

2. Reform Scotland has produced detailed research of all parties’ proposals for the future of Scotland and found that, under the SNP, Scotland will be the most fiscally centralised democracy in the world – Scotland’s Future: the constitutional report card https://reformscotland.com/public/publications/Scotlands_Future_The_constitutional_report_card2.pdf

3. Reform Scotland is an independent, non-party think tank that aims to set out a better way to deliver increased economic prosperity and more effective public services based on the traditional Scottish principles of limited government, diversity and personal responsibility. Further information is available at www.reformscotland.com