Scottish Aggregates Tax: Options for approaching cross-border taxation – Consultation Analysis

4. Summary of Responses – Impact Assessments

Background

4.1 Section 3 of the consultation detailed the impact assessments considered as part of the development of secondary legislation. These assessments are set out in sections 3.A. – 3.K.

4.2 Views were sought on a range of issues to inform the relevant impact assessments to ensure that potential effects are fully considered.

4.3 The main part of the consultation (section 2 – approaches to cross-border taxation) asked a number of specific questions on the business impact of the options. Therefore, business and regulatory impacts are covered in responses to this previous section.

4.4 Section 3 of the consultation posed the following questions:

Questions

22. Do you think that the cross-border taxation issues set out in this consultation will in any way impact upon:

• equal opportunities
• the Fairer Scotland Duty
• human rights
• child rights and wellbeing
• island communities
• sustainable development in Scotland

Yes / No

23. If yes, please give us your views.

24. Do you think that the cross-border taxation issues set out in this consultation will in any way impact upon:

• the Consumer Duty
• local government
• business and regulations
• privacy
• digital approaches

Yes / No

25. If yes, please give us your views.

4.5 One respondent (sector with an interest) answered ‘Yes’ to question 22. For question 25, they noted that middlemen would face unavoidable costs related to specification, conformity and familiarisation with new requirements. Furthermore, they advised that such costs would likely be passed on to customers.

4.6 Another respondent (aggregates industry stakeholder) noted for question 23, that cross-border taxation design will be neutral on equalities and rights, but that care must be taken to avoid indirect negative impacts, particularly:

• higher costs in island communities;
• reduced competition affecting affordability; and
• barriers to sustainable development and the use of recycled materials.

4.7 They suggested that the Scottish Government should ensure the approaches to cross-border taxation is proportionate, equitable, and aligned with Circular Economy goals.

4.8 For question 24, this respondent advised that the cross-border taxation framework will affect consumers, local government, businesses, and digital systems, though privacy is unlikely to be an issue. They noted that the impacts can be minimised or even made positive if:

• a light-touch, digital-first approach is taken;
• businesses are not overburdened with duplicate regulatory requirements; and
• costs are controlled to avoid inflationary impacts on local government and consumers.

4.9 For questions 22 – 25, another respondent (an individual) noted the following:

• Equal opportunities and consumer impact - cross-border taxation may disproportionately affect smaller firms and increase costs for consumers, especially in rural areas.
• The Fairer Scotland Duty - higher infrastructure costs could deepen inequalities in vulnerable regions.
• Human rights - SAT must not hinder public works or affordable housing, as this could infringe on the right to an adequate standard of living.
• Child rights and wellbeing - rising infrastructure costs could indirectly affect children's facilities like schools and playgrounds.
• Island communities - increased costs for transporting aggregates may limit development and opportunities on islands.
• Sustainable development in Scotland - rising infrastructure costs could indirectly affect children's facilities like schools and playgrounds.
• Local Government - higher aggregate costs may strain council budgets and delay public infrastructure projects.
• Business and regulations - SAT introduces new compliance burdens, especially for cross-border operations. Alignment with AGL is essential to avoid confusion and double taxation.
• Privacy - Minimal impact expected, but data handling must be secure and transparent.
• Digital approaches - Systems should be simple, compatible with AGL, and proportionate for businesses.