What rate should the new Scottish Rate of Income Tax be set at and why? This is one of the questions being asked by the Scottish Parliament’s Finance Committee as it begins its scrutiny of the 2016-17 draft budget.
From next year, the Scottish Parliament will have responsibility for setting a Scottish Rate of Income Tax. This was amongst the powers devolved to Holyrood in the Scotland Act 2012.
The Committee is inviting views on the Scottish Rate of Income Tax (SRIT) and the readiness of Scotland’s taxpayers and employers for its introduction.
Finance Committee Convener Kenneth Gibson MSP, said:
“From next year, revenue from the Scottish rate of income tax will be a significant part of the money spent on Scotland’s public services. There are key decisions to be made on the level the Scottish rate should be set at and how taxpayers and employers are informed about the introduction of SRIT.”
Mr Gibson continued:
“It is important for the Finance Committee to scrutinise the introduction of this new power and I would encourage people to submit their views to inform the Committee’s inquiry.”
The Act provides for the basic rate, higher rate and additional rate of the non-savings income of a Scottish taxpayer to be reduced by 10 percentage points. The Scottish Parliament is then required to set a new SRIT on an annual basis which will apply equally to all of these rates.
The Committee is inviting views
- What should the rate be for SRIT and why;
- If SRIT should be above 10% how should the additional funding be allocated;
- If SRIT should be below 10% how should the reduction be funded from existing expenditure;
- Has the introduction of SRIT been sufficiently well publicised to employers and tax payers.
The closing date for submissions is 28 August 2015.