Tax policy and the budget: consultation

This consultation seeks views on our overarching approach to tax policy, through Scotland’s first framework for tax, and how we should use our devolved and local tax powers as part of the Scottish Budget 2022 to 2023.

A Framework for Tax


Building on last year’s Budget representation exercise, the Scottish Government has been exploring ways to enhance its approach to tax policy making at the beginning of this new session of the Scottish Parliament.

This consultation seeks views on our overarching approach to tax policy, through Scotland’s first Framework for Tax, and how the Scottish Government should use its devolved and local tax powers as part of the Scottish Budget 2022-23.

Why we are consulting

The Scottish Government’s approach to tax policy has been developed over time, and has grown in importance since the devolution of further tax powers to Scotland in 2016.

Changes to devolved taxes are underpinned by a set of principles, including Adam Smith’s four principles of taxation (Certainty, Proportionality to the ability to pay, Convenience and Efficiency), which have been added to by a further two principles - a commitment to engagement and a firm approach to tackling tax avoidance.

The Scottish Government is now seeking to enhance the Scottish Approach to Taxation and communicate as clearly as possible the functions, principles and policy objectives that underpin how tax changes in Scotland are assessed and delivered.

In creating Scotland’s first Framework for Tax, the Scottish Government is aiming to:

Be open and transparent about how we approach tax policy. Responding to the recommendations of the Citizens’ Assembly, the Framework provides more information, in accessible language, on the purposes for collecting taxes; the principles that underpin our approach; our strategic objectives and our programme of work for this Parliament.

Exemplify best practice and embed continuous improvement by ensuring tax decisions are coherent, rooted in a defined set of principles and objectives and rigorously appraised; and by embedding a policy cycle, including evaluation, and putting proactive engagement at the heart of tax policy making.

Improve sequencing so that policy and Budget cycles align as far as possible, to ensure we take an organised and structured approach to tax policy.

Take a forward thinking approach especially in the wake of COVID-19, identifying medium to longer-term opportunities and threats to inform future work, new ideas and to be prepared should further tax powers be devolved to the Scottish Parliament.

In addition to the development of an overarching tax strategy, the Scottish Government considers this to be a crucial time to seek wide-ranging views on how we can best deploy our devolved tax powers to support the ongoing economic recovery from COVID-19.

We remain committed to being an open and consultative government in relation to the immediate priorities of stakeholders. We are seeking views on how we use our devolved and local tax powers as part of the Scottish Budget 2022-23 in order to build stronger fiscal foundations for Scotland’s future.

We welcome responses from organisations and individuals in line with the ‘Call for Evidence’ questions below (page 26).

Responding to this Consultation

We are inviting responses to this consultation by 26 October 2021.

Please respond to this consultation using the Scottish Government’s consultation hub, Citizen Space. You can access and respond to this consultation online by clicking here. You can save and return to your responses while the consultation is still open.

Please ensure that consultation responses are submitted before the closing date of 26 October 2021.

If you are unable to respond using our consultation hub, please complete the Respondent Information Form at the end of the document and send it to:

A Framework for Tax Consultation 3-B North Victoria Quay Edinburgh EH6 6QQ

What happens next

Following the closing date, all responses will be analysed and considered along with any other available evidence. The Scottish Government will publish responses where respondents have given permission for their response to be made public, and an analysis report will also be made available.

Responses to the consultation will inform policy development in relation to the Scottish Budget 2022-23 and longer term, with final tax policy decisions being set out within the Budget documentation. A final version of the Framework for Tax will also be announced alongside the Scottish Budget 2022-23.

Ministerial Foreword

Our tax system plays an integral role in the funding of the public services we all rely on in Scotland. COVID-19 has affected every person and business in Scotland and we are focused on doing everything we can to support our recovery from the pandemic and to create the conditions from which our economy can flourish.

As our powers over tax policy evolved over recent years and we embark on the new parliamentary term, the time is right to set out more about our Scottish Approach to Taxation. I am therefore delighted to announce the publication of our draft Framework for Tax for consultation. It will shape and support our response to the challenges we face now and in the future. It also demonstrates our commitment to open government and transparency in communicating our approach to tax policy.

The Framework communicates the principles that underpin our approach and the objectives we are aiming to achieve with our tax powers for the people of Scotland. It will help us assess, plan and deliver tax policies, manage our existing responsibilities and ensure we are prepared should further tax powers be devolved to the Scottish Parliament. It is the foundation from which we can design and deliver tax policies that support national outcomes and a fairer, greener and more prosperous economy for everyone.

The Framework will sit in a broader fiscal and economic landscape as we look to ensure Scotland’s economy recovers from the unprecedented effects of COVID-19, most notably as we set out an ambitious 10 year National Strategy to drive Scotland’s economic transformation, unleashing its entrepreneurial potential and growing Scotland’s competitive business base, prioritising investment in the industries of the future and delivering new, good and green jobs.

Alongside the Framework itself, we also want to ensure that we hear the widest possible range of views on how we use our tax powers at the Scottish Budget 2022-23. I want to hear views from across the country on the actions we can take, through our tax system, to build an economy that provides a sustainable, inclusive recovery. Everyone has a stake in tax and fiscal policy; they are your taxes and they pay for your public services.

I would like to thank you in advance for taking the time to respond to this consultation.

Kate Forbes MSP, Cabinet Secretary for Finance and the Economy



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