Reform Scotland demands change
Call to switch corporation tax powers to Holyrood
More powers should pass to Holyrood (pic: Terry Murden)
Scotland needs to have control of corporation tax to boost its economy, create jobs and attract more entrepreneurs, according to a think tank.
Reform Scotland said the country is facing long-term economic challenges as its population is predicted to grow at a slower rate than the rest of the UK.
Combined with a fall in the number of working age adults the country faces touch challenges growing the economy, it says. Social spending is forecast to rise sharply as the elderly population grows.
Holyrood already has powers to control income tax and Reform Scotland said there is a case for corporation tax to be devolved.
Director Chris Deerin said: “The working age population in Scotland, unlike the UK, will stall by 2043. Only 0.6% of Scottish taxpayers pay the additional rate of income tax while it is 1.1% across the UK as a whole.”
He added that Scotland has 750 business per 10,000 adults whereas the UK has more than 1,000.
Lower paid earners contribute 44% of income tax in Scotland. Across the UK this is 35%.
“We think devolving corporation tax would give the Scottish government more flexibility in tackling some of these issues.”
Corporation tax powers have been devolved to Northern Ireland, though this has not been enacted because the Assembly is not sitting.