Growth Commission adviser issues warning on tax increases
The Scottish Government should “think hard”about increasing taxes because doing so could have an impact on how attractive Scotland is to work and live, an adviser to the SNP’S Growth Commission has said.
The warning came from David Skilling, an internationally renowned economist and former adviser at the New Zealand Treasury, at an event organised by the think-tank Reform Scotland. Dr Skilling said: “My point would be that you need to think hard about the competitive impact in terms of how attractive Scotland is to firms and to people.
“If you look at the range of tax rates across many small economies there is a very wide range. So you have got the Nordics very high and Singapore very low. So there is no kind of magic tax rate above which you are in trouble and below which you are fine. But it is one of the elements that plays to competitiveness.”
Dr Skilling was launching his report showing that the Scottish economy has “lagged behind” that of other advanced small nations.
The report produced for Reform Scotland, showed that Scotland’s GDP per capita was £29,292 in 2017 – slightly lower than that of the UK and below that of 13 other comparable countries.
A Scottish Government spokeswoman said: “Our new, fairer, income tax policy will protect the 70 per cent of taxpayers who earn less than £33,000 a year and ensure they pay less tax next year for any given income, whilst asking those earning more than £33,000 to pay a proportionate amount more to support our public services.
“These measures combined with our investment in the NHS, the economy, infrastructure, education and essential public services ensure that in the year ahead Scotland will be the fairest taxed part of the UK, providing the best deal for taxpayers.”