By David Scott
15 January 2010
A modern and progressive property tax should underpin future local government funding in Scotland, according to leading finance directors.
The proposal comes from CIPFA in Scotland and the institute’s directors of finance section and has been seen by Public Finance.
It is contained in a joint submission to the Institute of Revenues Rating and Valuation, which is conducting an inquiry into local taxation.
The inquiry, launched last September, is the latest attempt by the revenue and finance profession to find a solution to the problem of local taxation.
This follows the Scottish Government’s decision to shelve plans for a local income tax because of a lack of support from opposition parties.
CIPFA and the group of finance directors have concluded that a modernised system of local taxation should be based on a reformed council tax that is more accountable, better understood and updated through regular revaluations.
An improved system of benefits should be introduced and options linked to housing policy should be tested to assist pensioners who are ‘asset rich’ but ‘income poor’.
The number of tax bands should also be extended to make the system fairer, CIPFA believes. The submission said: ‘The question of fairness is an area where there is scope for challenging the council tax. The tax is seen as not being wholly progressive.’
CIPFA believes it is important that local tax is decided and set locally if local accountability is to be maintained. It warns that continuation of the national arrangement to freeze local taxation in Scotland harms local accountability, as does the failure to revalue domestic properties since 1991.
‘Revaluations at approximately five-yearly intervals should be a routine maintenance requirement.
‘They should not require government sanction and, in the interests of local accountability, should be triggered automatically,’ the submission stated.
Council taxpayers also need better access to understandable financial information on what is to be spent and what has been spent.
The submission called for changes to the arrangement whereby councils collect both the local tax and water charges.
Accounting for both taxes should be separated as the monies passed to Scottish Water are effectively being subsidised by council taxpayers, it said.
15 January 2010
A modern and progressive property tax should underpin future local government funding in Scotland, according to leading finance directors.
The proposal comes from CIPFA in Scotland and the institute’s directors of finance section and has been seen by Public Finance.
It is contained in a joint submission to the Institute of Revenues Rating and Valuation, which is conducting an inquiry into local taxation.
The inquiry, launched last September, is the latest attempt by the revenue and finance profession to find a solution to the problem of local taxation.
This follows the Scottish Government’s decision to shelve plans for a local income tax because of a lack of support from opposition parties.
CIPFA and the group of finance directors have concluded that a modernised system of local taxation should be based on a reformed council tax that is more accountable, better understood and updated through regular revaluations.
An improved system of benefits should be introduced and options linked to housing policy should be tested to assist pensioners who are ‘asset rich’ but ‘income poor’.
The number of tax bands should also be extended to make the system fairer, CIPFA believes. The submission said: ‘The question of fairness is an area where there is scope for challenging the council tax. The tax is seen as not being wholly progressive.’
CIPFA believes it is important that local tax is decided and set locally if local accountability is to be maintained. It warns that continuation of the national arrangement to freeze local taxation in Scotland harms local accountability, as does the failure to revalue domestic properties since 1991.
‘Revaluations at approximately five-yearly intervals should be a routine maintenance requirement.
‘They should not require government sanction and, in the interests of local accountability, should be triggered automatically,’ the submission stated.
Council taxpayers also need better access to understandable financial information on what is to be spent and what has been spent.
The submission called for changes to the arrangement whereby councils collect both the local tax and water charges.
Accounting for both taxes should be separated as the monies passed to Scottish Water are effectively being subsidised by council taxpayers, it said.
