Medium Term Financial Strategy: where’s the medium-term focus or strategy?

Last week, the Scottish Government published its 2nd Medium Term Financial Strategy (MTFS). The purpose of the MTFS, as set out by the Parliament’s Budget Process Review Group, was to ‘provide a means of focussing on the longer term sustainability of Scotland’s public finances’. This is clearly a positive and …

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What is the case for increasing council tax rates in Scotland?

This blog shows that council tax rates are now markedly lower in Scotland than in England and Wales. Increasing council tax in Scotland to match rates in Wales (or England) would raise substantial revenues, but would have adverse distributional implications. On balance, the case for more fundamental reform of property …

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VAT assignment: paused for now, but will it be pulled for good?

The Scottish Government announced last week that the assignment of Scottish VAT revenues to the Scottish budget is likely to be delayed – possibly until after the fiscal framework review in 2022. Giving evidence to the Finance and Constitution Committee last week, Derek MacKay said: ‘I am becoming increasingly minded …

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Is the Scottish budget for 2019/20 disadvantaged by UK Government policy decisions on income tax?

Is the Scottish budget for 2019/20 disadvantaged by UK Government policy decisions on income tax? The Scottish Government argues that it is. The government’s case is reasonable – but potentially undermined by its own stated policy commitments. The Smith Commission identified two ‘no detriment’ principles which it said should apply …

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The emerging outlook for Scottish income tax revenues

How have Scotland’s revenues from income tax been performing since income tax powers were transferred to the Scottish Parliament in April 2017? This is clearly an important question to ask. The Scottish budget in any year is determined in part by the rate of growth of Scottish income tax revenues …

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Taxing contradictions: is Scotland the fairest taxed part of the UK?

Delivering his Draft Budget in December, Derek MacKay argued that Scotland was the ‘fairest taxed part of the UK’. As the dust settles on the 2019/20 Scottish Budget, it’s a good time to reflect on the Scottish Government’s approach to taxation, and to examine that claim. Devolved tax policy in …

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