Meeting of the Parliament 20 February 2018
Today, the Scottish Parliament votes on setting all rates and bands for Scottish income tax. This is our opportunity to use the powers of the Scottish Parliament to build a fairer and more prosperous country, and to put our progressive values into action.
In November, we published the income tax discussion paper, which set out four tests that we believe an income tax policy change must pass. That civic engagement was well received and allowed for constructive engagement in the tax-setting process. Our four tests were that change must help to maintain and promote the level of public services that people in Scotland expect, must ensure that the lowest-earning taxpayers do not see their taxes increasing, must ensure that changes make the tax system more progressive and reduce inequality and, along with our decisions on spending, must support the wider economy. I am clear that the proposals that are before members today pass those four tests.
I ask the Scottish Parliament to agree to the motion, which will raise for the tax year 2018-19 an extra £219 million to invest in public services, to tackle poverty, to support Scotland’s economy and to protect people who are on low incomes, thereby making the system fairer and more progressive.
The new starter rate, combined with an increase in the personal allowance, will result in 70 per cent of all income tax payers paying less tax than they do this year on their current incomes. That means that no one who earns less than £33,000 will pay more than they did last year and that more than half of taxpayers will pay less than they would pay if they lived elsewhere in the United Kingdom. The proposals mean that, for the majority, Scotland will be the lowest-taxed part of the UK.