Scots fiscal commission urges simple and stable tax regime

5 Nov 13
Independence could give Scotland the opportunity to build a tax regime that is both economically competitive and fiscally sound, according to two new reports from the Scottish Government’s Fiscal Commission Working Group.

By Keith Aitken in Edinburgh | 5 November 2013

Independence could give Scotland the opportunity to build a tax regime that is both economically competitive and fiscally sound, according to two new reports from the Scottish Government’s Fiscal Commission Working Group.

The group, chaired by former Scottish Enterprise chief executive Crawford Beveridge, also recommended that Scotland appoint a non-partisan fiscal commission to scrutinise financial assumptions and projections – even in respect of the new tax powers devolving to Holyrood under the Scotland Act – and that it should adopt and enforce a clear set of fiscal rules or principles.

‘Fiscal responsibility is an essential element of a successful economy, helping deliver sustainable economic growth, resilience and fairness,’ Beveridge said.

‘A strong set of principles combined with an independent commission to oversee them would help an independent Scotland avoid the problems that have affected the UK and other countries in recent years.’

Beveridge’s group said that Scotland should design a tax system based on principles of simplicity, neutrality, stability and flexibility. 

It should minimise administrative and compliance costs in relation to the total tax take, thereby boosting investment and growth, and should keep the issue of globalisation centre stage.

The reports also proposed the creation of a tax policy forum to ensure that the fiscal regime operates to standards of maximum transparency and integrity.

Finance Secretary John Swinney, who has previously indicated the intention of creating a Scottish equivalent to the UK Office of Budget Responsibility, welcomed the reports. He said they reflected the Scottish Government’s ‘proud record’ of effective economic management.

‘With independence we have opportunities to build on our reputation for fiscal responsibility and put in a place a framework with real credibility, something previous UK governments have failed to do, helping create the financial mess the UK finds itself in today,’ Swinney said.

But former UK Chancellor Alistair Darling, who chairs the anti-independence Better Together group, said that the reports raised more questions than they answered, and underlined the Scottish Government’s silence on ‘the big question’ of how much tax Scots would pay post-independence.

  

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