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Scottish Gov't Sets Out Reelection Tax Promises

by Robert Lee,, London

22 April 2016

The Scottish National Party (SNP) has set out how it would use newly devolved tax powers if it is reelected in May.

Launching the manifesto, party leader and First Minister Nicola Sturgeon said: "All our policies are underpinned by a commitment to use our new tax powers fairly and responsibly – and in a way that increases rather than jeopardizes the revenue we have to invest in our public services."

"We will not ask those on low- and middle-incomes to pay the price of Tory austerity through higher taxes. But we will expect those on higher incomes to shoulder more of the burden."

According to the manifesto, a re-elected SNP government would increase the personal tax-free allowance to GBP12,750 (USD18,252) by the end of the next parliament, which will be dissolved in 2021. The UK's Conservative Government has promised to increase the UK threshold to GBP12,500 by 2020.

The SNP would also freeze the basic rate of income tax, but would not implement the increases in the entry threshold to the 40 percent rate of tax planned by the UK Government. The SNP would instead freeze the threshold in 2017-18, and ensure that it rises by a maximum of inflation until 2021-22.

These measures would generate at least GBP1.2bn in additional revenue over the course of the next Parliament, the manifesto stated.

The manifesto also promises an overhaul of the council tax system. An SNP government would increase council tax for the four highest bands, and amend the method by which the rates are calculated for these bands. It would increase the council tax reduction scheme for low-income households, and allow councils to raise rates by a maximum of three percent a year.

Once power over the air passenger duty (APD) is devolved to the Scottish Parliament in April 2018, an SNP government would seek to gradually reduce the overall burden of APD by 50 percent. The levy would be entirely abolished when resources allow.

TAGS: tax | air passenger duty (APD) | property tax | United Kingdom | tax thresholds | tax rates | tax reform | inflation | individual income tax | Scotland

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