Scots to pay £1.2bn more income tax than they would in England if no changes made
The impartial Scottish Parliament Information Centre (SPICe) said ministers face a “challenging set of decisions”.
It comes after the UK Government announced a series of measures including a cut to the basic rate of income tax to 19p in the pound.
However, plans to abolish the 45p additional rate for high earners were scrapped following a backlash.
Income tax rates and bands are devolved in Scotland.
Deputy First Minister John Swinney, the acting Finance Secretary, previously said ministers would not replicate the UK tax cuts but would “consider carefully the correct measures for Scotland”.
In a blog post, SPICe said: “If the Scottish Government makes no changes to its income tax policy, this would mean that, in total, in 2023-24, Scottish taxpayers will be paying an estimated £1.2 billion more in income tax than they would be paying if the English income tax policy applied.
"If no changes (other than potentially uprating thresholds) are made to Scottish income tax policy, all Scottish taxpayers will be paying the same or more income tax in 2023-24 than they would do in England, regardless of how much they earn.”
It said those earning £25,000 would pay around £100 per year more in Scotland than they would in England, rising to almost £2,000 for those earning £50,000.
The gap widens to more than £4,000 for those earning £250,000.
SPICe said cutting the basic rate to 19p in Scotland would cost the Scottish Government an estimated £200-250 million in reduced income tax revenues in 2023-24.
It said: “All this makes for a challenging set of decisions ahead for the Scottish Government in respect of its income tax policy.
"Does it move closer to the UK government policy for lower earners, or even do something more generous?
"This would come at a cost in terms of reduced revenues at a time when budgets are already under severe pressure.
"Or does it maintain its current five-band policy and no longer be able to claim that more than half of Scottish taxpayers pay less income tax than they would in the rest of the UK? We will find out at budget time.”
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