Breaking New Ground? Developing a Scottish tax to replace the UK Aggregates Levy: consultation

The Programme for Government 2022 to 2023 sets out a commitment to introduce a Scottish Aggregates Levy Bill. To help inform the Bill, this consultation invites views on how a new and distinctive Scottish aggregates tax, replacing the current UK levy, should be structured and operate.

Chapter 4: Tax Rates

4.1 The Bill providing for a future tax will include enabling powers for Ministers to set rates of tax through secondary legislation.

4.2 The Scottish Government will not however set out its intentions with regard to tax rates at this stage, or include a rate on the face of the Bill. As with other fully devolved taxes, rates will be set through secondary legislation prior to the introduction of the tax depending on a range of factors, including economic and environmental considerations.

4.3 We are however, interested in views on what factors should be taken into consideration when setting a rate for the tax, and on the options and processes that should apply.

4.4 We are also interested in views on whether a Bill should provide Ministers with the flexibility to introduce more than one rate of tax, so as to allow for differential charging in future to take account of different circumstances and impacts.

4.5 As context, for the UK levy tax is chargeable by weight, with a single flat rate applied to all taxable material regardless of quality, source or end use. Following inflation based increases this rate increased from £1.60 per tonne in 2002 to £2 per tonne in 2009. However, although the UK Government's stated policy intention is for the rate to increase annually, it has remained frozen since 2009. If adjusted for inflation since then, the rate would now be about £2.65-£2.70 per tonne.


A19 – Which factors should be taken into consideration when setting any rate for the tax, including through the annual Scottish Budget process?

A20 – Would it be appropriate for the Scottish Government to include powers in a Bill to legislate for more than one rate of tax? If so, on what basis?



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