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| Scottish independence: Tax and benefits reform 'could benefit economy' | Scottish independence: Tax and benefits reform 'could benefit economy' |
| (about 5 hours later) | |
| An independent Scotland could link the tax system to welfare payments, according to an expert commission set up by the Scottish government. | An independent Scotland could link the tax system to welfare payments, according to an expert commission set up by the Scottish government. |
| It will say the complex UK tax system could be reformed in Scotland, at lower cost and relatively easily. | It will say the complex UK tax system could be reformed in Scotland, at lower cost and relatively easily. |
| That could be an economic advantage over "key competitors", it will say. | That could be an economic advantage over "key competitors", it will say. |
| The Fiscal Commission will argue that a new system could remove the sharp withdrawal of benefits as people get jobs, making work more attractive. | The Fiscal Commission will argue that a new system could remove the sharp withdrawal of benefits as people get jobs, making work more attractive. |
| Two reports on the subject will be published by the Scottish government. | Two reports on the subject will be published by the Scottish government. |
| The recommendations will say that independence would provide Scotland with the opportunity to ensure the tax and welfare systems help boost growth, address inequality and stabilise the economy. | The recommendations will say that independence would provide Scotland with the opportunity to ensure the tax and welfare systems help boost growth, address inequality and stabilise the economy. |
| The pro-Union Better Together campaign believed the commission's approach raised more questions than it answered. | |
| The Fiscal Commission said an "obvious option" would be for an independent Scotland to continue with the existing UK system, but "this would be a missed opportunity". | |
| "The UK system has a number of weaknesses that could be reformed relatively easily," it says. | "The UK system has a number of weaknesses that could be reformed relatively easily," it says. |
| Among the reforms are more than 1,000 exemptions from tax, and tax law running to more than 10,000 pages, it is estimated. | Among the reforms are more than 1,000 exemptions from tax, and tax law running to more than 10,000 pages, it is estimated. |
| The report on tax says a less complex system "would require political willingness and imply tough choices". | The report on tax says a less complex system "would require political willingness and imply tough choices". |
| It also argues that the experience of Ireland, Sweden and New Zealand is that smaller countries can collect tax more efficiently - that is, at a lower cost per pound collected. | It also argues that the experience of Ireland, Sweden and New Zealand is that smaller countries can collect tax more efficiently - that is, at a lower cost per pound collected. |
| Crawford Beveridge, chairman of the Fiscal Commission, said: "The UK tax system is complex and costly, and does not fully reflect the unique characteristics and needs of Scotland. There is considerable room for improvement in its design and operation." | Crawford Beveridge, chairman of the Fiscal Commission, said: "The UK tax system is complex and costly, and does not fully reflect the unique characteristics and needs of Scotland. There is considerable room for improvement in its design and operation." |
| Commenting on a "whole system" approach to linking taxation with welfare, he went on: "Small countries are not just scaled down versions of larger countries, and utilising Scotland's size through streamlined institutions and decision-making would facilitate a comprehensive approach which allows a clear focus on the objectives of taxation and welfare across the entire public sector and beyond. | Commenting on a "whole system" approach to linking taxation with welfare, he went on: "Small countries are not just scaled down versions of larger countries, and utilising Scotland's size through streamlined institutions and decision-making would facilitate a comprehensive approach which allows a clear focus on the objectives of taxation and welfare across the entire public sector and beyond. |
| "If Scotland was to get such design right, this could represent a major competitive advantage, offering a more robust and efficient tax system than key competitors." | "If Scotland was to get such design right, this could represent a major competitive advantage, offering a more robust and efficient tax system than key competitors." |
| Scottish Finance Secretary John Swinney said: "The paper makes clear that the Westminster system has become overly complex and imposes unnecessary burdens on both individuals and businesses. | Scottish Finance Secretary John Swinney said: "The paper makes clear that the Westminster system has become overly complex and imposes unnecessary burdens on both individuals and businesses. |
| "With independence, the Scottish government could change this outdated and antiquated system and transform it into a system that is fit for 21st century Scotland." | "With independence, the Scottish government could change this outdated and antiquated system and transform it into a system that is fit for 21st century Scotland." |
| The reports from the Fiscal Commission are also expected to recommend that an independent Scotland should have a budget watchdog, but on a smaller scale than the Office for Budget Responsibility (OBR) which oversees UK spending. | The reports from the Fiscal Commission are also expected to recommend that an independent Scotland should have a budget watchdog, but on a smaller scale than the Office for Budget Responsibility (OBR) which oversees UK spending. |
| Instead of replicating the OBR's role in providing forecasts for the UK Treasury and assessments of the impact of different taxation and spending options, the Fiscal Commission recommends that a Scottish watchdog should comment on the overall shape of the budget position of the government. | Instead of replicating the OBR's role in providing forecasts for the UK Treasury and assessments of the impact of different taxation and spending options, the Fiscal Commission recommends that a Scottish watchdog should comment on the overall shape of the budget position of the government. |
| 'Big question' | |
| The leader of the pro-Union Better Together campaign, Alistair Darling, said that while income tax rates might change in an independent Scotland, the SNP government was "telling us nothing about exactly how much tax we would pay". | |
| He added: "Until the nationalists give us an answer to the big question on tax, no-one will believe any of the promises they make. | |
| "Once again we have the SNP government saying one thing in public and another in private. | |
| "Today he pretends we could save money, but John Swinney previously told the SNP Cabinet that collecting taxes would be far more expensive for Scotland after leaving the United Kingdom." |