THE SNP have branded a Labour MSP “ridiculous” after he criticised Scotland for having higher taxes for the wealthy.
The Institute for Fiscal Studies has said it has been unable to establish whether higher taxes in Scotland have cut Government revenues while calling for a “pause” on any further increases.
Researchers looked at analysis by HMRC focusing on the Scottish Government’s initial major divergences from UK tax policy beginning in 2018.
They found two UK Government studies on the 2018-19 tax changes, which saw the creation of new tax bands, were inconclusive. The previous financial year, the Scottish Government also brought more people into the higher rate of tax.
Higher taxes may have cost the Scottish Government more than official estimates from the independent Scottish Fiscal Commission (SFC), the researchers said.
But in the first study, the IFS said the estimates on the greater than anticipated cost to the Scottish Government of increasing taxes on higher earners contained “wide” margins of errors. The other HMRC study the IFS examined showed that while the costs were higher than assumed by the SFC there remained “wide margins of error”.
Scottish Labour MSP Michael Marra described the analysis as “damning” adding it “lays bare how financially and economically illiterate this SNP Government is”.
He said: “For too long the SNP has tried to use income tax hikes as a sticking plaster to cover for low growth and government waste, but it’s just not working.
“Working people cannot keep picking up the bill for the SNP’s failure – the Government must not repeat its mistakes in this year’s budget.”
SNP MSP David Torrance has said Marra’s remarks are “ridiculous”, accusing Labour of providing tax giveaways for the rich.
He said: "This is ridiculous from Michael Marra – the public will take one look at this and see just how unserious the Labour Party is.
"The Labour UK Government just hiked taxes on charities, hospices, GPs, and care providers, putting jobs and services at risk – but now Labour in Scotland is calling for tax cuts for the wealthiest.
“Politics is about choices, and Labour is choosing to provide tax giveaways for the richest in society while hammering vital community services.
"If the people of Scotland weren't fed up with Labour before – once they learn that Anas Sarwar wants to follow the Liz Truss financial blueprint for economic ruin they certainly will be.”
Chancellor Rachel Reeves has been criticised for raising employers’ national insurance (NI) contributions in her Budget last month.
Barclays warned the move would hit workers’ living standards while other major business organisations accused the Government of “betrayal”.
Economists at Barclays said the policy would cause real incomes to take a hit, as companies pass on the cost of the levy through lower pay rises and higher prices.
