core theme policy area: taxation



The Scottish budget is in the process of significant reform.

Substantial new fiscal powers are being transferred to Holyrood, including the devolution and assignment of tax revenues and the devolution of some social security powers.

The Scottish Parliament will soon oversee annual public spending of over £40 billion and have significant tax responsibilities – including £11 billion of income tax revenues. This is on top of existing local taxes such as Council Tax and Business Rates and a number of new fully devolved taxes including Land and Building Transactions Tax and the Air Departure Tax.

The Scottish Parliament also has the power – with HM Treasury agreement – to introduce new taxes in Scotland if it so wishes.

Around 40% of devolved expenditure is now funded by tax revenues generated in Scotland – a figure that will rise to 50% once VAT revenues are assigned.

an informed debate

There has been considerable debate in Scotland about what taxes should be controlled by Holyrood and what taxes should be controlled by Westminster.

But there has been far less debate about the effectiveness of these new powers, how best to use them, and the implications for both Scotland and the other nations of the UK.

There is an urgent need therefore, for credible and impartial analysis of how these powers can be best utilised to support the prosperity of the people of Scotland.

·       How might different tax policy decisions impact on the Scottish economy in the long-run?

·       What are the consequences of introducing a higher or lower rate of income tax vis-à-vis the rest of the UK?

·       What might be the impact of introducing a new environmental tax be on the Scottish economy?

·       What lessons can Scotland draw upon from the experience of other countries?

These are just a small selection of the types of questions that we would be interested in hearing proposals on.