Land Value Tax: FOI release

FOI reference: FOI/17/01210
Date received: 30 May 2017
Date responded: 19 June 2017

Information requested

You asked a number of questions relating to a possible Land Value Tax. Specifically:

• if the Scottish Government will apply this [land value] tax in Scotland?
• is this Tax the responsibility of the Scottish Government?
• in the event of a Labour government will this tax be applied in Scotland even although Scotland has devolved power?

Response

I would like to know if the Scottish Government will apply this tax in Scotland?

Ministers have now implemented the package of measures to reform local taxation that was announced by the First Minister on March 2nd 2016 with the relevant legislation approved by Parliament in the Autumn of 2016. During the scrutiny of this legislation, the Cabinet Secretary for Finance and the Constitution committed to Parliament that the reforms to Council Tax are part of a longer journey towards making local taxation fair and progressive. The Scottish Government's future policies to deliver those next steps are to consider the Review of Business Rates by Ken Barclay – Ministers have publicly committed to respond quickly when it concludes in the summer, and, to formally consult local government on exchanging a fixed proportion of the general revenue grant paid by the Scottish Government to local government for the assignment of a fixed proportion of income tax receipts.

Is this Tax the responsibility of the Scottish Government?

Local taxation is wholly devolved to Scottish Government, so a new form of local taxation would be a matter for the Scottish Government and Parliament rather than the UK Government.

In the event of a Labour government will this tax be applied in Scotland even although Scotland has devolved power?

It is hard for me to respond to this question as much of an answer would be speculative. The answer in part depends on the purpose of any new tax introduced by a Westminster Government which in turn depends on whether it is a matter devolved to the Scottish Parliament or reserved to the UK Government and Parliament. You may find the information available from https://www.gov.uk/guidance/devolution-settlement-scotland helpful in describing the interaction between the two Parliaments.

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