Ministers seek guidance on tax priorities for Budget

How the devolved taxes and fiscal framework should be used to support the COVID-19 economic recovery is a question being put for public views by the Scottish Government.

Ahead of the Scottish Budget 2021-22, ministers believe this to be a crucial time to seek wideranging views on how to best deploy their tax, borrowing and reserve powers to support the recovery, and attempt to address any deficiencies in the current devolved fiscal arrangements. 

The Programme for Government 2020-21, announced last week, committed to launching an open representations process in advance of Budget 2021-22, to inform decisions on the upcoming Budget.

Ministers acknowledge that with a deep recession and the prospect of a sharp rise in unemployment, they face "unprecedented challenges" in setting the next Budget. In response, they are "seeking the widest possible views from across Scotland on how we use our limited fiscal powers to support Scotland’s recovery from COVID-19, both through the Scottish Budget 2021-22 and longer term, including as part of the review of the fiscal framework due to take place after the Scottish Parliament elections in 2021".

Among other questions the paper asks how the Government should use its devolved and local tax powers to support the recovery, with longer term as well as shorter term considerations in mind, and whether there are any new tax proposals that should be implemented; and what fiscal rules it should follow – all having regard to factors including likely effectiveness, revenue implications, implications for recovery and growth, and impact on inequality.

Click here to access the consultation. Responses are due by 8 October 2020.