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Alex Salmond is
a new entry this year
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Alex Salmond, former Scottish first minister and leader of the
Scottish National Party (SNP), may have
lost the referendum on independence for Scotland in
September, but the campaign for self-government, which he led,
has had a
profound impact on the tax system there.
Even before the vote on September 18, plans were already in
place to give Scotland power to raise some tax revenue and
administer the system. The Scotland Act, passed by the UK
Parliament in 2012, allowed the government in Edinburgh to set
what is described as
the Scottish rate of income tax and raise two new taxes
– Land and Buildings Transaction Tax and Scottish
Landfill Tax – from April 2015. A new agency
– Revenue Scotland – will administer the two
new charges.
But more momentous changes are in the offing now. The day
after the vote,
David Cameron, the UK prime minister and a member of the
Global Tax 50 in 2013, set up a cross-party group to agree on
what new powers Scotland should get over all areas of
government, not just tax. Though it did not go as far as the
SNP wanted, such as giving the Scottish Government control over
corporation tax, the Smith Commission proposed that, as well as
the two new taxes, Scotland should get the revenue from the
first 10 percentage points of the standard rate of VAT, receive
all the tax revenue from the employment income of Scottish
individual taxpayers and control Air Passenger Duty and the
Aggregates Levy.
The Smith Commission was a reaction to the fear among the
supporters of the union between Scotland and the rest of the UK
that after September 19 they could end up dealing with another
country. It was the zeal and prowess Alex Salmond, who stepped
down as first minister and SNP leader shortly after the vote,
brought to the campaign which changed the Scottish tax system
forever.