Pre-Budget Scrutiny 2027-28: the affordability and sustainability of Scotland’s tax and spending plans – joint CIOT and LITRG response
The Chartered Institute of Taxation (CIOT) and the Low Incomes Tax Reform Group (LITRG) submitted a joint response to the call for views published by the Finance and Public Administration Committee of the Scottish Parliament. Our comments focused on tax aspects only.
In response to the Committee’s invitation for views on actions to grow the tax base, we indicated that more evidence is needed to determine whether there are any behavioural effects as a result of current income tax divergence.
We also considered the complexities for taxpayers on lower incomes, due to the interaction of Scottish income tax with universal credit thresholds.
The call for views also requested thoughts on the main risks to devolved tax revenues in Scotland. It is important that Ministers and the Scottish Government scrutinise the viability of devolved taxes, particularly new taxes that generate relatively lower levels of tax revenue.
We highlighted the importance of trust in the tax system to voluntary compliance.
We also took the opportunity to note the continuing absence of a regular legislative mechanism for the maintenance of devolved tax legislation. This poses a risk to revenues and the credibility of devolved taxes.
You can read CIOT and LITRG’s full submission using the link provided. A link is also given to the original call for evidence on the Scottish Parliament’s website.