Budget 2021/2022: supporting the COVID-19 recovery - Scotland's taxes and fiscal framework - consultation

In advance of the Scottish Budget 2021-2022, we are seeking views on the role of Scotland’s devolved taxes and Fiscal Framework in supporting the COVID-19 economic recovery.

Annex: Call for Evidence

Tax Policy

How should the Scottish Government use its devolved and local tax powers to support the COVID-19 recovery as part of Budget 2021-22?

Your representation should contain policy proposals in relation to:

1. devolved and local taxes as part of the COVID-19 recovery, with a focus on Budget 2021-22; and

2. where applicable, any longer-term tax policy considerations for the Scottish Government.

Where possible, please consider the role of tax policy in the COVID-19 recovery, in particular balancing potential trade-offs between raising revenue to fund public services and COVID-19 support; stimulus for individuals and businesses most affected by the crisis; and supporting a greener, fairer and more equal society and economy.

Are there any further tax powers that should be devolved to the Scottish Parliament to facilitate our ability to support the economic recovery?

You may wish to consider the list of reserved tax powers (Figure 1) and how or whether these could be used more effectively in a Scottish context. You may also wish to consider which tax policy and powers you think are better suited at a UK wide level. 

Are there any new tax proposals you would like to see implemented by the Scottish Government?

You may wish to express views on new tax ideas or proposals as part of the COVID-19 recovery.  Please consider whether your proposals fall within the scope of current devolved powers, including suitability for devolution using the mechanism for new national devolved taxes under the Scotland Act.

Fiscal Framework

What particular fiscal challenges have been highlighted as a result of the COVID-19 emergency?

Your response should contain any observations and evidence on how the devolved fiscal powers have or have not been sufficient to deal with this exceptional situation and what this reveals about the need for change.

What changes, if any, should be made to the scope of devolved fiscal powers under the Fiscal Framework?

Your response should contain proposals for any changes to fiscal powers (e.g. borrowing, use of the Scotland Reserve). Where possible, explain the rationale for extending or limiting powers, including whether and what borrowing and Reserve limits should be changed or abolished?

What fiscal rules should the Scottish Government follow?

Fiscal rules set out how a government uses its fiscal powers (e.g. self-imposed limits on borrowing).  Your response should set out whether there are any rules that are of particular importance now, or in conjunction with a future extension in the scope of fiscal powers.

Factors to consider in your response

In your response to the questions above, you may wish to consider the following factors and any potential trade-offs:

  • likely effectiveness of the proposal 
  • revenue implications for the Scottish Government
  • costs and whether the proposal represents value for money
  • wider macroeconomic implications (for economic recovery and growth)
  • sectoral impacts
  • distributional impacts, e.g. how the proposal would impact different household types, income deciles, businesses, etc.
  • administrative and compliance costs and issues
  • inequality – does the proposal address, or could it exacerbate, inequalities?
  • legislative and operational requirements
  • environmental impacts and climate change


Email: covidrecoveryconsultation@gov.scot

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