Devolved taxes: policy framework consultation

Ministerial foreword

I am delighted to be launching this consultation on a new approach to the policy making process for the fully devolved taxes.

The first two fully devolved taxes, Land and Buildings Transaction Tax and Scottish Landfill Tax, have been operational for almost four years now in Scotland.  The devolution of two further taxes - Aggregates Levy and Air Departure Tax – is also on the horizon.  This presents us with the opportunity to draw on our experiences since 2015 and think about how we can do things differently, both in terms of our policies and how we engage with our people, communities and businesses.

I believe that the proposals set out in this paper will not only help us to better manage our existing taxes, but will lay important foundations for a clearer approach to tax policy-making that can also apply to further tax powers in the years to come.

We want to make Scotland an attractive place to do business, and we recognise the important message that a modern, competitive, stable and transparent tax system sends both domestically and overseas.

That is why a cornerstone of the Scottish Approach to Taxation is certainty.  In the present context this means that individuals and businesses should have confidence in the Government and the tax system when making financial decisions.

Through our tax policies we have demonstrated our ability to take informed decisions in a responsible way and have chosen a distinctive, progressive approach to tax policy-making in Scotland.

Taxes are key to funding the high quality public services we all enjoy.  Taxes also support our aim of having a strong economy; an economy that is built on growing, competitive and innovative business; that is environmentally sustainable and inclusive; and that provides jobs, incomes and quality of life for all of our people and communities.

Scotland benefits from an informed and knowledgeable civic society.  We believe that more and better engagement means better outcomes for people, families and communities; a more robust, inclusive and sustainable economy; and leads to a greater trust and understanding of government.

Our strong track record of engaging with individuals, businesses and professional bodies has been central to ensuring that our taxes are fit for purpose and that their impacts are understood.  This consultation builds on the open and consultative approach we have taken on the development of tax policy and legislation to date.

Another important part of this overall process is consideration of whether the existing legislative process for devolved taxes legislation remains suitable.  In its report into Scotland’s Budget process, the Budget Process Review Group recommended that further work be undertaken to explore options for an alternative legislative process for devolved taxes legislation, including consideration of whether there is the need for a Finance Bill.

This marks another important milestone for tax in Scotland. I am pleased that a working group has been established by the Scottish Government, the Scottish Parliament and others to take this work forward.  I look forward to updating you on this later this year.

I believe everyone should have in interest in tax. This consultation provides you with the opportunity to help shape the way the Scottish Government takes decisions on its fully devolved taxes, and I very much look forward to receiving a wide range of views.

I would like to thank you in advance for taking the time to respond to this consultation.

Kate Forbes
Minister for Public Finance and Digital Economy