FORCING multi-national firms to pay their fair share should be at the “heart of the tax system” after independence, a report by Alex Salmond’s elite economic advisers has said.
The SNP government must also “look beyond” its high profile-pledge to slash corporation tax and sign up to international deals which would subject global firms to tougher collection regimes.
This could bring an end to multi-nationals simply “shifting activities” between countries for tax purposes, according to a report by the Fiscal Commission Working Group.
There has been widespread anger over the paltry levels of tax which firms such as Starbucks, Google and Amazon pay in the UK, despite sizeable operations here.
The report has found independence would give Scotland a “unique opportunity” to create a modern tax system which could become a powerful tool to boost the economy.
“The [Scottish] government should put the issue of globalisation at the heart of its tax system – including how to tax modern multi-national companies and considering how best to collect and tax in a world of international supply chains and e-commerce,” the report states.
“International agreement is critical to ensuring companies pay the appropriate level of taxation and the government should work with key international partners to ensure the fair collection of taxes.”
Bodies like the EU should be supported in efforts to crack down on global tax evasion through greater cross-border co-operation and transparency. This would allow countries to work out exactly what income is taxable in each of them.
This could “ensure fairness and avoid inefficient shifting of activities for tax purposes,” the report adds.
Crawford Beveridge, who chairs the group set up by the First Minister, said the UK tax system is “complex and costly”.
“With independence, the Scottish Government could introduce a better tax system,” he said yesterday.
Finance secretary John Swinney said the SNP government has a “proud record” on managing the public finances of Scotland effectively.
“We will of course build on that with the added responsibilities that come with managing all of Scotland’s taxes and spending,” he added.
Scottish Secretary Alistair Carmichael said the paper “completely avoids” the question of which taxes would go up to fill the £3.4 billion black hole in Scotland’s finances estimated by the Institute of Fiscal Studies in the first year of independence.