This item was published during the term of a previous administration that ended in April 2007
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Views sought on local taxation
20/01/2005
The independent Local Government Finance Review
Committee (LGFRC) today launched its consultation, seeking
views on how local services are paid for.
This wide-ranging consultation is considering the system
of local government finance and will submit proposals to
Scottish Executive Ministers. The consultation document has
been produced by the Committee, chaired by Sir Peter Burt.
It was set up by the Executive to review different forms of
local taxation, including reform of the council tax.
The Committee will use a checklist to assess the
possible options for the future local taxation system. The
checklist includes a number of criteria, including
fairness, collectability, stability and minimising the
costs of collection.
Launching the consultation, Sir Peter Burt, said:
"The objective of this questionnaire is to invite
responses from anyone with an interest in local government
finance. We welcome as wide a participation as possible to
ensure that the Committee can benefit from respondents'
opinions."
There are a number of ways to obtain the consultation
paper:
- By emailing
LGFRC@scotland.gsi.gov.uk
- By texting "loctax" to 84118___; or
- By writing to the Local Taxation Consultation,
Victoria Quay, Leith, Edinburgh EH6 6QQ.
The consultation paper will shortly also be available on
the Committee's website:
www.localgovernmentfinancereview.org
Details of the nearest available public internet access
points can be obtained from Freephone 0800 771234
The Local Government Finance Review Committee was
established in June 2004. Its purpose is:
"to identify the pros and cons of implementing any
changes to the local taxation system in Scotland, including
the practicalities and the implications for the rest of the
local government finance system and any wider economic
impact, and to make recommendations."
Ministers have set out criteria against which the
Committee should consider different forms of local
taxation. These are:
- Effect of the local economy/economic
growth: in broad terms the economic impact of
different local taxation systems will vary depending on
what is being taxed (e.g. property or people) and the
spread of the tax (e.g. whether set nationally or
locally).
- Ability to pay/fairness: issues
include both fairness to individuals and fairness
between local authority areas.
- Preventing avoidance/collectability:
the local taxation system should minimise the scope for
avoiding payment and consequently eases the task of
collecting the tax.
- Stability/predictability: it is
desirable that individual taxpayers should have a
reasonably firm idea of their future tax commitments
and that local authorities should have a reasonable
firm idea of how much revenue the system if likely to
generate.
- Relationship to the Benefits system:
The Council Tax Benefit Scheme is a very important part
of the current arrangements - would such a system be
required under a reformed or new taxation system.
- Buoyancy: the local taxation system
should be flexible enough to accommodate a wide range
of economic circumstances and the political will at any
time about the levels of taxation.
- The cost of collection: it is probable
that some of the possible local taxation systems will
be more costly to collect than others.
- Who collects the tax? : some of the
possible options would require different forms of
collection, for example, local authorities or the
Inland Revenue.
- Shift to a new system/transitional
arrangements: looking at what practical steps
would be required to change the system, how quickly
would that take or if transitional arrangements would
be required.
Responses to the consultation paper should be submitted
by March 16, 2005.
The Committee's members are Sir Peter Burt (Chair),
Professor John Baillie, Peter Daniels and Janet Lowe. It
also has a specialist adviser, Kenneth McKay.
The Committee expects to report to Ministers in the
summer of 2006.