The Scottish Government believes that the council tax is fundamentally unfair and should be abolished and replaced with a fairer local income tax based on ability to pay.
In light of prospective cuts of £1 billion to the Scottish Government budget from Westminster and the absence of Parliamentary support the Scottish Government will not introduce Local Income Tax legislation in this Parliamentary session.
The Government has however, guaranteed that funding will be made available to local government in order to freeze council tax to the end of this parliamentary term.
Finance Secretary John Swinney:
"Across the public sector we are dealing both with a squeeze on public spending - reflected by the worst settlement for the Scottish Government since devolution - and the impact of the global downturn.
"But against that back drop we have acted to protect the Scottish Government's funding for local government services - and the shared outcomes that those services will deliver.
"The Cabinet has therefore decided not to introduce legislation to abolish the unfair Council Tax and replace it with a local income tax until after the election in 2011.
"But make no mistake, this government will fight that election to win a parliamentary majority that backs the abolition of the unfair council tax.
"And we look forward to a financial environment at that time more suitable to the introduction of a fairer local income tax."
Consultation on a Local Income Tax
The consultation exercise on 'A Fairer Local Tax for Scotland' concluded in July 2008 and over 500 detailed responses were received. The Finance Secretary, John Swinney is grateful to all those members of the public and organisations who submitted their views.