Humza Yousaf, the First Minister, said “we should not take wealth taxes off the table.” Photo: Ken Jack/Getty Images Europe
Humza Yusuf should shelve proposals to introduce a wealth tax to plug a £1bn black hole in the Scottish Government's finances because it would be «costly and complex», experts warn.< /p>
Latest This week Mr Yousaf, the First Minister, said “we should not rule out wealth taxes” in the future Scottish Budget due to the “extraordinary pressure” on the government’s finances.
p>In particular, he cited a recent report by the Scottish Trades Union Congress which proposed raising £1.4 billion a year by introducing an annual tax of 1 per cent on wealth, including property, pension funds and property such as jewelery and art.
But the Chartered Institute of Taxation has warned it would be acting illegally if it tried to introduce a national tax as it would be beyond Holywood's powers.
The institute said any wealth tax should be a local levy. , where councils are responsible for determining «who and what is taxable» and how it is collected and enforced.
Even if this were possible, the institute said it could be expensive for local authorities and «will not offer a quick solution» to the immediate Scottish budget deficit.
Shona Robison, the Scottish National Party's finance minister, admitted in May that the Scottish Government's day-to-day spending «could exceed our funding» by £1 billion in 2024/25, rising to £1.9 billion in 2027/28 .
The SNP will need a Westminster deal
Mr Yousaf said a wealth tax would help him afford extra spending on poverty after campaigners said they were «bitterly disappointed» with his first government program since he became First Minister.
If tax is to be levied on wealth exceeding £1. STUC estimates the tax would affect 12 per cent of Scottish households, each paying an average of £8,000 a year.
But Christopher Thorpe, technical officer at the Chartered Institute of Taxation, said: “Any wealth tax would need to be introduced as a local tax, since the Scottish Parliament does not have the power to introduce new national taxes on its own.»
“Holyrood will need the consent of Westminster and that is not a given. Even if a locally targeted wealth tax were considered, it could itself be costly and complex and would not offer a quick solution.»
Mr Thorpe said councils could it would be difficult to establish, collect and implement such a tax at a time when they «already feel their resources are under pressure.»
Instead, he argued that the SNP-Green coalition might be better off looking at taxes that are already under its control, with council tax being the most obvious choice as it «incorporates an element of wealth in the form of property values» .
Possibly. sale of government buildings
The Scottish Government has published proposals that would see bills in the four biggest council tax bands rise by between 7.5 and 22.5 per cent.
But Ms Robison told BBC Scotland's Sunday show: “We are very, very aware that households are struggling, we are very aware that we need to proceed with caution and we need to look at these things holistically.”
With many government employees working from home, the finance minister suggested that some government buildings should instead be sold or leased to raise funds.
A Scottish Government spokesman said: “The Scottish Government believes that powers to tax wealth should be devolved to the Scottish Parliament. This will mean that wealth taxation can be revised to work effectively in a modern Scottish context.»
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