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Scottish government makes corporation tax case | |
(about 2 hours later) | |
The Scottish government has set out its proposals for Holyrood to win control of corporation tax from Westminster. | |
Finance secretary John Swinney said cutting the headline rate would encourage business growth and boost economic recovery. | |
Critics of the move said it could leave ministers short of money to pay for public services. | |
Excluding north sea oil, corporation tax generated £2.6bn in revenue for Scotland in the year to 2010. | Excluding north sea oil, corporation tax generated £2.6bn in revenue for Scotland in the year to 2010. |
href="http://www.scotland.gov.uk/Resource/Doc/919/0120242.pdf" >Setting out the Scottish government's case, Mr Swinney argued that using new powers to cut the business tax and encourage business research would leave more profit for investment, making Scotland a more attractive place for businesses to locate. | |
The UK Treasury is considering devolving control of corporation tax to Northern Ireland, given its unique position in sharing a land border with the Republic of Ireland - where the levy is set at 12.5%. | |
The Scottish government wants the same powers included in the Scotland Bill, currently going through Westminster. | |
Mr Swinney said separate analysis showed if Northern Ireland was able to pre-announce a cut in the corporation tax rate to 12.5%, 58,000 more jobs would be created, while living standards and economic growth would rise. | |
"Scotland needs full control of the key economic levers to meet the specific challenges facing the Scottish economy - and the cross-party Scotland Bill Committee in the last parliament concluded that this power should be available to the Scottish government if it is granted to Northern Ireland," he said. | |
"Lower corporation tax is a vital source of competitive advantage in an integrated global economy, helping to attract new businesses and highly-skilled jobs. | |
"A competitive corporation tax regime has been a feature of the economic success of many countries, and we want Scotland to have the same opportunities to bring in jobs and boost growth." | |
Mr Swinney has been backed by some businesses leaders, including Jim McColl. | Mr Swinney has been backed by some businesses leaders, including Jim McColl. |
But the Institute of Chartered Accountants in Scotland said that changes to the rate of corporation tax - the main rate currently stands at 26% - could leave the government short of money to fund public services. | |
In addition, it could start a tit-for-tat war over corporation tax rates with the other home nations. | In addition, it could start a tit-for-tat war over corporation tax rates with the other home nations. |