The Chartered Institute of Taxation has warned that implementing a wealth tax is beyond Holyrood’s power.
Introducing a wealth tax is beyond Holyrood’s power and would not offer a “quick-fix solution” to pressures on the government’s finances in the Scottish budget, the Chartered Institute of Taxation has warned.
This would include net property wealth, such as primary residence and second homes. Pension wealth and possessions, such as antiques and artworks, would also fall in the taxable wealth category, according to STUC report.
The proposed tax model could raise £1.4 billion per year for the budget and would apply to households, rather than individuals, said the report.
Christopher Thorpe, a technical officer at the Chartered Institute of Taxation, has warned that even if Scotland considered a locally focused wealth tax, it could be “costly and complex” and would not swiftly solve Scottish budgetary issues.
At a time, when councils are already “finding their resources under pressure,” it would be challenging for them to set up and enforce a new wealth tax model, said Mr. Thorpe.
The proposed tax model would affect 12 percent of Scottish households, if imposed on wealth above a £1 million threshold. These households would be taxed an average £8,000 per year.
“I will never shy away from the belief that those who earn the most should pay the most,” said the first minister.
Wealth tax could offer Holyrood the “greatest opportunity for change in the short to medium term, but it needs political will to make it work,” Mr. Thorpe said.
The Scottish government could instead look at the taxes already under its control, such as council tax, he suggested. This way, Holyrood won’t need to wait for Westminster’s go-ahead, Mr. Thorpe said.
With many civil servants working from home, the Scottish government won’t need the same configuration of buildings, Ms.