Finance and Public Administration Committee inquiry: Managing Scotland’s Public Finances: A Strategic Approach

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.