Finance and Public Administration Committee inquiry: Managing Scotland’s Public Finances: A Strategic Approach
The Finance and Public Administration Committee of the Scottish Parliament are carrying out their pre-budget scrutiny in respect of the Scottish Budget 2025-26. Their inquiry focuses on three key areas. The LITRG response focuses on the second of these, which relates to the Scottish Government’s approach to taxation. The inquiry considers what the draft tax strategy should include and how potential behavioural responses affect business and individuals. This is to aid the achievement of the aims of the inquiry, which include to influence development of the Scottish Government’s tax strategy.
![Tartan pattern on the left, Scottish flag on the right and a thistle in the centre Tartan pattern on the left, Scottish flag on the right and a thistle in the centre](/sites/default/files/styles/responsive_600w/public/2024-03/3_scottish_taxpayers._canva.com_.png?itok=98WBImcm)
The LITRG submission includes responses to four of the Committee’s questions. In terms of making progress against the Scottish Government’s four priorities, we comment that the two taxes that might offer most scope are Scottish income tax and council tax. These could assist with raising additional revenue for funding policy actions, and/or assist with redistribution.
We offer comments on the elements that we think the Scottish Government’s draft tax strategy should include. In particular, we highlight:
- provision for clear guidance and public awareness-raising measures,
- a plan for evidence-gathering (including consultation) to support policy proposals,
- a clear process and timetable for tax policy changes,
- a timeframe and process for consideration of interactions, for example with reserved policies,
- a process and timeframe for ensuring there is effective and efficient administration in place,
- requirements for impact assessments and post-implementation evaluation,
- a clear legislative process.
In respect of the Committee’s question on addressing concerns about behavioural change in response to tax policies, we suggest that improving public understanding and wide consultation may be of assistance.
You can read LITRG’s full submission using the link provided. A link is also given to the original call for evidence on www.parliament.scot.