Local tax 'last thing Scots need'

http://news.bbc.co.uk/go/rss/-/1/hi/scotland/7800319.stm

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Replacing council tax with a local income tax is the "last thing" Scotland needs in the economic downturn, according to Scottish Labour.

The party claimed costs for introducing the tax could run to £60m, with £18m a year in ongoing costs.

Labour finance spokesman David Whitton said that burden should not be placed on employers.

The Scottish Government said Labour had no policy on tax and council tax costs about £62m to collect and administer.

According to Labour, the upfront costs for a nationally set tax were estimated a between £55m-£60m by the Burt committee on local government finance in 2006, with £18m in annual ongoing costs.

The SNP cannot allow this to happen David WhittonLabour finance spokesman Mr Whitton said: "The estimate of what the Nat Tax will cost to set up is a frightening prospect for business.

"The policy is ill-thought out and this kind of burden should not be placed on employers.

"In these challenging economic times, the introduction of LIT will make Scotland the highest taxed part of the UK and it will discourage companies from wanting to do business in Scotland. The SNP cannot allow this to happen."

The SNP adminstration has the support of the Lib Dems at Holyrood for the local income tax, but the SNP wants it set centrally at three pence in the pound, while the Lib Dems local say councils should be able to vary the rate.

'Lower rates'

An aide to Finance Secretary John Swinney said: "No-one is taking Labour seriously on local government taxation, as they have no policy and no ideas of their own, apart from defending the discredited council tax.

"Along with their friends in the Tory Party, it seems Labour will defend the council tax to the end. Labour and the Tories are the 'council tax cabal'."

And he said a local income tax would be cheaper than the council tax - which costs about £62m to collect and administer.

The aide insisted: "A successful Scotland will continue to attract people to Scotland for all the right reasons - particularly one that will have the lowest local tax in the UK."