Agenda item 5 is consideration of the delegated powers in the Landfill Tax (Scotland) Bill at stage 1. The committee is invited to agree the questions that it wishes to raise in written correspondence with the Scottish Government on the delegated powers in the bill. On the basis of the responses received, the committee would expect to consider a draft report at its meeting on 11 June.
Section 6 enables the Scottish ministers to prescribe certain activities that take place on a landfill site as a taxable disposal. Does the committee agree to ask the Scottish Government why it is necessary for the power to permit the modification of primary legislation and why the negative procedure is considered to be appropriate when varying without textual amendment prescribed landfill activities other than by providing for something to be such an activity when it would not otherwise be, given that so doing affects the basis of the charge to tax and so goes to the bill’s central principles?
Sections 7 to 10 provide that certain disposals are not to be taxable disposals, although they would otherwise meet the criteria that are set out in section 3. In effect, those sections provide exemptions for certain disposals. Section 11 allows the Scottish ministers, by order, to provide that disposals that would otherwise be taxable are not taxable and conversely that disposals that would not otherwise be taxable are to be treated as taxable.
The Scottish landfill tax will be payable at a lower rate when the material that is disposed of consists entirely of “qualifying material”. Section 13(4) gives the Scottish ministers the power to list in an order the materials that are to be qualifying materials. Does the committee agree to ask the Scottish Government why it is considered that specifying the qualifying materials is a “technical and administrative” matter, given the effect that listing materials as qualifying materials has on a taxpayer’s liability, and to ask whether it would be more appropriate for the affirmative procedure to apply to the exercise of the power, save in circumstances when the provisional affirmative procedure already applies?
Section 16(1) makes the operator of an authorised landfill site the person who is liable to pay the tax on each taxable disposal. Section 17(1) enables the Scottish ministers to make regulations extending that liability to the controller of a landfill site. Does the committee agree to ask the Scottish Government why it is necessary for the power to permit the modification of any enactment, instead of permitting only the modification of the bill, and to ask why it is considered appropriate that the extension of liability to controllers under the power should be subject to the negative procedure unless primary legislation is textually amended, given that that involves the extension of tax liability to persons who would not otherwise be liable?
I certainly think that that would give clarity, convener.
Sections 32 and 33 concern the keeping of records by registrable persons and about material at landfill sites. Section 32 confers power on the Scottish ministers to require registrable persons to preserve records of a prescribed description for up to six years, and section 33(1) confers a power to require persons
Section 35(1) permits the tax authority to delegate “any of its functions” other than functions of legislating to the Scottish Environment Protection Agency. Does the committee agree to ask the Scottish Government to explain how the delegation of functions will be identified and recorded in the interests of transparency and accountability?
Before we conclude this item, convener, I think that, without seeking to improve the policy memorandum, we should also ask the Government for an overall view of how it has constructed the bill and why it has chosen this particular direction. After all, by being required to consider the tax-raising powers, the Parliament is in new territory. Tax law operates differently from other legislation and the Scottish Government, which has its own budget bill, might be able to make comparisons with the UK Government and its own financial provisions. It would be useful if the Scottish Government could give us more contextual stuff and, given the way in which tax law is designed, explain what kind of flexibility a Government has to respond either to the passing of a finance bill at Westminster or a budget bill up here.
That seems to make perfect sense. Do members agree?
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