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Meeting of the Parliament 25 April 2013

25 Apr 2013 · S4 · Meeting of the Parliament

Item of business

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

Swinney, John SNP Perthshire North Watch on SPTV

The Scotland Act 2012 devolves responsibility for taxes on land and property transactions and disposal to landfill to the Scottish Parliament from April 2015. The bill sets out the provisions and rules for the land and buildings transaction tax, which will replace stamp duty land tax in Scotland from April 2015.

In my statement to Parliament in June, I set out the approach that the Government intends to take on the new taxation responsibilities that have been passed to the Parliament. The proposals are firmly founded on Scottish principles that still hold good today. In “An Inquiry into the Nature and Causes of the Wealth of Nations” in 1776, Adam Smith set out four maxims with regard to taxes: the burden should be proportionate to the ability to pay, and there should be certainty, convenience and efficiency of collection. Those principles provide the bedrock on which to build a system to meet the needs of a modern 21st century Scotland. To those four principles, the Government adds our core purpose of delivering sustainable economic growth for Scotland. In assessing the proposals that we have in front of us, I will consider the four principles that I have set out.

The Government has sought to use what responsibility we have for taxation to ensure that no one is asked to pay more than they can legitimately afford to pay in relation to tax provisions. The Land and Buildings Transaction Tax (Scotland) Bill signals a move away from the United Kingdom Government’s slab tax approach to stamp duty land tax, which distorts the market. Instead, we propose a progressive system of taxation in which the amount paid is more closely related to the value of the property and, therefore, to the ability of the individual to pay. That approach has been warmly welcomed by tax professionals and others during the public consultation process for the bill.

The second principle is the provision of certainty. We consider it important to provide certainty about when and how much tax is due, and that is an important guiding principle for our new system. The consultation on the bill has been extremely helpful and productive, and we will continue to engage with taxpayers and professionals to provide certainty and ensure that tax changes have been properly thought through and communicated before being introduced. Even when we require to move swiftly to tackle threats of tax evasion or avoidance, we will, wherever possible, seek to provide information and clarity about our intentions.

One of the opportunities before us is that of creating a simple and administratively efficient tax collection system. We will ensure that it is easy to fulfil the obligations of a citizen in Scotland to pay taxes. We envisage a system that is simple to operate and digital first. We will develop appropriate information technology systems to ensure that information about Scottish taxes and ways to pay them is easily accessible to all, in line with our broader objectives, while respecting the fact that some taxpayers will continue to want to use non-digital methods.

The fourth of the principles is that the tax system should be efficient. It is clear that taxes and revenues must be devoted to paying for public services and not consumed in tax administration. Scotland will benchmark itself against international standards to ensure that the administration costs are kept to a minimum. Our approach to tax collection is right for Scotland and it will be the most cost efficient for Scotland.

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Meeting of the Parliament 25 April 2013

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