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13 January 2025

Blog: Scotland’s Tax Strategy: a visionless roadmap to nowhere?

The Tax Strategy’s failure to deliver a vision and time-bound plan for bold reform shows why Tax Justice Scotland is needed more than ever. A fairer tax system won’t come without a fight. Now’s the time to step up and make an irresistible case for change ahead of the 2026 Scottish Election.

This blog was written by Lewis Ryder-Jones, Oxfam Scotland’s Advocacy Adviser.

Tax Justice Scotland is seeking to promote a better conversation on tax policy. As such, the views expressed in this blog are those of the author and do not necessarily reflect the views of Tax Justice Scotland and its diverse supporters.

 

Incredibly, in her 30-minute Budget statement last month, the Cabinet Secretary for Finance, Shona Robison MSP, didn’t mention the Scottish Government’s long-awaited Tax Strategy once.

Instead, a paper that is so critical to Scotland’s future beyond the horizon of a one-year budget, was quietly released. It didn’t even warrant a mention in the Government’s press release.

This perhaps wasn’t all that surprising, after all, highlighting tax reform at a politically sensitive time would always have been perceived to be a risky move by the SNP minority Government.

But the omission signalled something bigger: that meaningful devolved and local tax reform is firmly off the table until after the 2026 election.

But did the 48-page Tax Strategy offer any signs of hope? Not really.

What we’d hoped the Tax Strategy would say

Many of us, perhaps somewhat naively, had high hopes that the Tax Strategy would set out a concrete vision and roadmap for delivering a better, fairer tax system in Scotland, as part of wider efforts to secure reforms at UK and global levels.

After all, the Scottish Government’s Framework for Tax 2021 had already set out “principles of good tax policy making”, so this new Tax Strategy was a clear opportunity to move beyond a theoretical model and set a clear strategic direction for tax decision-making.

At Oxfam Scotland, we had argued that to drive meaningful change, including to tackle poverty, invest in care, and address the climate crisis, the Strategy must commit to a tax system in Scotland that – alongside smarter public spending – would proactively, strategically, and consistently increase revenues. Further, it should redistribute income and wealth to combat stark inequalities, while shaping behaviours in socially and environmentally positive ways, protecting those on low incomes, and stimulating green sectors of the economy.

Crucially, we hoped it would outline how the Scottish Government intends, in practice, to both use and reform devolved and local taxes to deliver a greener, fairer and more inclusive society.

Given the 2021 Framework’s “programme of work” remains largely unfinished or delayed, we were also looking for concrete proposals, timelines, and milestones to deliver on promises, like reforming Council Tax and implementing the Air Departure Tax.

What the Tax Strategy does say

The Strategy wasted no time ruling out any changes to Income Tax before 2026. This backs Ministers into a corner, limiting options for raising revenue in the short-term. It could also pose challenges for balancing the books next year while delivering vital spending, such as the very welcome commitment to mitigate the two-child limit in Scotland from 2026 onwards.

Elsewhere, the Strategy (again) promises to complete the devolution of Air Departure Tax – a necessary step on a flight path towards better taxing aviation, and particularly private jet use in Scotland. However, while the First Minister described a private jet tax as a “welcome suggestion”, the Strategy was predictably scant on details of when and how it will do this before the parliamentary term ends next year.

On the upside, the Strategy commits to strengthening the evidence base for tax policy, including through an evidence review in 2025. This is crucial, as fearmongering about tax changes – especially claims of avoidance or higher earners fleeing – often lacks solid proof.

However, while the Strategy emphasises gathering evidence on the “competitiveness and attractiveness” of Scotland’s economy, it disappointingly overlooks how tax can drive a fairer, greener future. That said, the commitment to assess how previous progressive income tax changes have impacted different groups is a step in the right direction.

Notably, there’s also a pledge to improve public understanding of tax: that’s essential for building support for a fairer system. But, again, what’s missing is a clear plan to make this happen. Instead, we’re promised the publication of new “tax literacy outcomes” in 2025.

What the Tax Strategy doesn’t say

The Strategy lacks concrete proposals or timelines for much-needed reforms.

For example, instead of immediately launching a revaluation of properties – one of the key stepping-stones identified by Tax Justice Scotland – it offers vague commitments to “build consensus” on Council Tax reform. Similarly, it merely commits to “support open dialogue,” and “explore” potential changes to Non-Domestic Rates.

Perhaps most concerningly, the Strategy fails to offer us any tangible vision for what our devolved and local tax (and spend) systems could achieve in future. While it says the tax system will support the government’s four priorities, including eradicating child poverty, it doesn’t say how.

Elsewhere, commitments lack timescales. For example, the acknowledgement of the unequal balance of taxes across labour, income and wealth, is welcome, along with the commitment to “explore what wealth taxation could look like for Scotland”. But while a programme of work is promised, one that will also consider how tax can be used to “encourage positive behaviour change”, there is no deadline for it being completed.

Instead, we’re promised two further related documents in 2025 – a new “Medium Term Financial Strategy” and a “Fiscal Sustainability Delivery Plan”, both due in the Spring. I’m not holding out much hope that these other strategies will reveal much more than this one.

What this means for Tax Justice Scotland

The Tax Strategy’s failure to deliver a vision and time-bound plan for bold reform shows why Tax Justice Scotland is needed more than ever. A fairer tax system won’t come without a fight. Now’s the time to step up and make an irresistible case for change ahead of the 2026 Scottish Election.