Scottish independence: tax haven warning - Gray

SNP proposals to cut corporation tax could turn an independent Scotland into a tax haven for multinational companies such as Google and Microsoft, according to Labour’s finance spokesman.

Picture: Getty
Picture: Getty

Iain Gray said Scotland would lose out on jobs and investment as large companies used the country as a base to channel money and avoid tax.

But Finance Secretary John Swinney pledged that multinationals would pay their fair share in the event of a Yes vote in next month’s referendum.

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The two men went head to head in a debate on independence organised by the Federation of Small Businesses at Edinburgh’s Dynamic Earth.

Mr Gray told the audience of small business owners: “If you deliberately set your corporation tax, not at what you think is right, but less than the country next door to you, what you’re doing is you’re trying to create yourself as a tax haven.

“The example we’re often given about how great a policy this would be is Ireland, who significantly cut their corporation tax rate.

“And what happens there of course is that multinational companies like Google and Microsoft set up in Ireland, move their money through Ireland but don’t employ people there, they simply use it as a conduit in order to pay less tax.

“I don’t think that’s what we should be looking to build Scotland’s future on, whether we’re part of the UK or independent.”

Mr Swinney said the proposed cut in corporation tax would make Scotland a more competitive place to do business and create an incentive for growth.

He said he had already taken steps on tax avoidance with the Revenue Scotland and Tax Powers Bill passed in the last week of Parliament before MSPs rose for the referendum.

The Bill includes an anti-avoidance rule which had been set at “the highest possible bar”, Mr Swinney said, adding that the issue was “at the heart of what I’m trying to do”.

Mr Swinney added: “We have got to make sure that those who’ve got tax responsibility to pay, they pay, they pay in full and they do it effectively to support our public finances.

“That’s the commitment that I will give you in an independent Scotland.”