Fair taxation at a local level
We support a fairer system of local taxation to replace the Council Tax. We participated in the cross-party Commission on Local Tax Reform to try to develop a consensus to build an enduring alternative. The decision by the Scottish Government to ignore the recommendations of the cross-party Commission and to make arbitrary changes to Council Tax has discredited the whole process.
We are attracted by the economic and social benefits that could be brought about by a system of land value tax, which works well in other countries. Such a system does not penalise people who improve their property as the tax is based only on the land value. A land tax encourages derelict land in urban areas to be brought back into productive use.
It will be possible to consider and evaluate further this proposal for domestic properties alongside a review of business rates. There could be many common features that result in a more simplified overall tax system.
This work will take time but it is important to get change of this scale right and to make it enduring for generations. The Commission recommended that further work to support this proposal should take place in the 2016-21 parliamentary session. We agree.
Substantial proposals for change will only be enacted in the 2016-2021 parliamentary session if they enjoy wide cross-party and public support.
To accelerate this as far as we can we will speed up the process to map all of Scotland’s land ownership. This will help assess the capability of the system to replace business rates.
We will also make sure robust transition arrangements are in place, alongside measures to protect people with low incomes from adverse changes.
We will recognise the diverse needs of every local authority and will make sure that they each get at least 90 per cent of the average support offered by central government to support their services.
On business taxation, Scottish Liberal Democrats are committed to a competitive system. We support a full-scale review of business rates to consider the fundamentals of the system – such as the current penalties businesses face when they improve their premises or install renewable energy machinery - and the difficulties faced by some start-up companies.
We want businesses to have a strong role in shaping the new system.