Financial experts tell SNP: Local income tax won't work

Published on Sunday 13 July 2008 22:13

ALEX Salmond's plans to introduce a local income tax in Scotland suffered a fresh setback last night when accountants who deal with council finances said the scheme would not work.

The Institute of Revenues, Rating and Valuation, which represents tax professionals working in all of Scotland's councils, said the SNP's plans for a local income tax would leave councils short of cash and would affect front-line services.

The IRRV also warned that it would increase collection and enforcement costs and lead to opportunities for tax avoidance.

The Scottish Government has published plans to scrap the council tax and replace it with a local income tax, set nationally at 3p in the pound.

The proposals have already met with severe criticism inside and outside the parliament.

Over the weekend, the Institute of Chartered Accountants of Scotland questioned the wisdom of the scheme.

Hillary Kelly, IRRV Scotland Association president, said last night: "The public needs to be aware that a local income tax will be more expensive to administer and will be more intrusive into people's lives than a property-based tax and will place more burdens on business."

And she added: "The fairest approach to local taxation would be a reformed property-based tax taking into account the ability to pay."

The SNP administration argues that the local income tax will be fairer than the council tax because it will be based on ability to pay.