21 January 2005
The Scottish committee of inquiry into the future of local government finance has stressed its independence from the Lyons review in England, raising the possibility that Scotland could embark on a different local taxation route.
The committee, set up by the Scottish Executive and chaired by former Bank of Scotland chief executive Sir Peter Burt, published a consultation paper on January 20, calling for views on reform of the council tax.
The 30-page paper examines options including the re-introduction of domestic rates, the introduction of a new land value tax or the revival of a type of poll tax.
The committee, which has called for responses by March 16, promises a 'thorough and objective' analysis of possible local taxation systems.
It adds: 'Our conclusions will be our own. They may or may not be different from those reached in earlier reviews, and they may or may not take us down a different road from Sir Michael [Lyons]. What is certain is that our conclusions will be made on the basis of the best evidence available to us and only after detailed consideration.'
Previous taxation systems such as rates and poll tax, either singly or in combination with some other tax, are not ruled out. The paper points out that domestic rates applied in Scotland from 1854 to 1989, when they were replaced by the poll tax, or community charge. It asks whether there would be an advantage in bringing back domestic rates.
Various questions are raised about local income tax, including how it should operate and whether it should be separate from the national income tax system or fully integrated with it.
The committee will use a checklist to assess possible options. This includes a number of criteria including fairness, collectability, stability and minimising the cost of collection.
The paper also looks at the balance of funding between local and central government and options for business rates, including the possibility of returning responsibility for setting these to local authorities.
PFjan2005
