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Swinney Budget agreed

Historic vote leaves income tax at UK rate

John Swinney delivers BudgetScottish taxes were pegged to the rates in the rest of the UK today in a historic vote in the parliament.

Using its newly-achieved powers for the first tim, the Government secured the vote expected to force through its budget.

Both Labour and the Liberal Democrats have called for the rate to be increased by 1p, saying this would raise almost £500 million for education and local services.

But the Scottish Rate of Income Tax (SRIT) was fixed at 10p, which means the tax paid by Scottish residents in 2016/17 will be the same as those taxpayers in the rest of the UK.

Speaking as the Scottish rate resolution was passed by the Scottish Parliament, Deputy First Minister John Swinney said: “The income tax powers we currently have do not allow us to make income tax fairer, and I am not prepared to inflict an additional burden on the poorest taxpayers.

“Taxes should be proportionate to the ability to pay. Where we have the freedom to shape a taxation system that is fair and proportionate to the ability to pay, we have created a tax system, through the Land and Buildings Transactions Tax (LBTT) that is progressive and helps those who most need it.

“A rate of 10 pence for Scottish rate of income tax protects those on the lowest taxable incomes and ensures Scottish taxpayers are not penalised as we introduce this historic new tax regime.

“I remain focused on delivering a Fiscal Framework which is fair for Scotland, and which will open the way for this Parliament to gain further income tax powers.

“As I committed to in December, before the Parliament dissolves in March, and subject to the agreement of a Fiscal Framework, I will set out how we propose to proceed on this important matter.”

The timetable for agreeing the new framework has been pushed back to 23 February.

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