Institute of Chartered Accountants of Scotland published an article that explains the problems facing the country before the devolution of tax powers.
The document, prepared by the Tax Committee, calls for the publication of five-year RoadMap which explains the purpose of the Scottish fiscal policy.
Currently, the Scottish Parliament is responsible for the Scottish income tax rate applicable to the April 6, 2016. The UK government will deduct £ 0.10 from three British income tax rates. The Scottish Parliament will be able to charge a Scottish rate that will apply equally across these bands. The rate will be set at 10 percent which means that there will be no change in the level of tax for individuals pay. But in April 2017, the Scottish Parliament will be able to set the rate over income tax bands.
According to the Tax Committee, “if the income tax rate will deviate from the British then it needed for clear explanations and instructions to reassure taxpayers.”
Furthermore, from 2019-20 Scottish Government will assigned a decrease in the standard rate from 0.10 pounds to 0.25 pounds.
Tax Committee said that “the purpose of assignment of VAT is to harmonize the tax revenue to the economy, VAT revenues could be a measure of the Scottish economy. This in turn will have an impact on the program of economic support of the Scottish Government the areas through which to grow the economy. For example, due to businesses are exempt from VAT (for example, financial institutions) or zero rate taxable businesses (e.g. food industry) which constitute a significant part of the Scottish economy. “