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John Swinney to detail Scottish Corporation tax plans Scottish government makes corporation tax case
(about 2 hours later)
The Scottish government is to unveil its plans on taking control of corporation tax. The Scottish government has set out its proposals for Holyrood to win control of corporation tax from Westminster.
Finance Secretary John Swinney will confirm a move to lower the headline rate of business tax and to give tax breaks to small firms. 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.
But Mr Swinney sees making a reduction in the charge as a way to add fresh revenue and attract new businesses. 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.
He believes the move could create jobs, improve living standards and encourage economic growth. 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.
However, 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. 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.
'Don't add up'
Scottish Labour's finance spokesperson Richard Baker said: "It is all very well calling for new powers but the focus should be on boosting the Scottish economy, not a power grab by ministers.
"The SNP have many questions still to answer on this proposal. Corporation Tax is already being cut across the UK.
"The SNP seem to argue that we can have lower taxes and higher investment in public services, and these sums just don't add up."‪
The UK Treasury is considering whether to devolve 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.