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Income Tax

Part of the debate – in the Scottish Parliament on 25th June 2019.

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Photo of Derek Mackay Derek Mackay Scottish National Party

No, it does not mean that at all. The reality of the income tax reconciliation is that it is down to forecast error at the hands of the Scottish Fiscal Commission and the Office for Budget Responsibility. That issue will be addressed. At the moment, we are talking about forecasts of forecasts. Once we have outturn data, we will know exactly what the position is. At that point, we will be able to more deeply understand the issue—which might be distributional—of the potential growth in higher-rate taxpayers in the rest of the UK compared with Scotland.

The factual position is that income tax is going up year on year. We will collect more in income tax, but we face issues such as the block grant adjustment and UK rates potentially going up more. Those are among the issues that have been addressed by the SFC.

The truth is that the Scottish economy is doing well. The economic indicators are strong. Income tax will be going up. We want to further stimulate growth, but the SFC and the Fraser of Allander institute say that our economic success story is threatened by Brexit, which can still be averted.

Rachael Hamilton’s question was partly about the position of taxpayers. Scotland has a more progressive tax system. The structure is fairer, as are the decisions that we have taken. If, for example, there is a Boris Johnson premiership, it is perfectly clear that the funding will go towards tax cuts for the richest 10 per cent in society. That is unfair and will continue austerity. The Scottish Government will not be making such a choice, because it is not the choice of the Scottish people.