Global Tax 50 2014: Alex Salmond

Alex Salmond is a new entry this year

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 systemthere. 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 taxand 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 ministerand 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.