This government plans to design a simple and transparent tax system after independence. As set out on page 121 of Scotland’s Future, the government will work with Revenue Scotland to simplify the tax system to reduce compliance costs, streamline reliefs and help to reduce tax avoidance, with the aim of generating additional tax revenues of up to £250 million per year by the end of the first term of an independent Parliament.

As recognised in the Oxford Economics report, this commitment is separate to our plans to set out a timescale for reducing corporation tax in Scotland by up to 3 percentage points below the prevailing UK rate.

The Scottish Government did not provide information to Oxford Economics to inform its recent report referred to in the question.

The Scottish Government has published detailed modelling of the potential impacts of corporation tax policy equivalent to a reduction in the headline rate by 3 percentage points.

The report which is available by following the link below, outlines the impact of such a policy in terms of boosting output, employment and government spending, amongst other variables, and, where appropriate, breaks them down by time period. The analysis indicates that the level of GDP in Scotland could increase by 1.4% and employment by 27,000 after 20 years.

http://www.scotland.gov.uk/Resource/0038/00388940.pdf

Under the current constitutional framework the Scottish Government and Scottish Parliament only have limited control over fiscal policy. The Scottish Parliament is only responsible for around 8 per cent of taxes raised in Scotland when including a geographical share of North Sea revenues. With the new tax powers of the Scotland Act 2012 this figure will only increase to around 16 per cent.

Under the Scotland Act, if revenues in Scotland were to increase by 1 per cent across the four main taxes and spending on key benefit to fall by 1 per cent, only 12 per cent of the total net gain in revenues would be retained by the Scottish Government. More detail is available on pages 6 and 7 of Childcare and Labour Market Participation – Economic Analysis paper.

The information on the number of all parliamentary questions answered by Scottish Ministers since 2011, where the members were referred to the original answer is not held centrally. A parliamentary questions search can be performed by following the following link:

http://www.scottish.parliament.uk/parliamentarybusiness/28877.aspx.

<>The answer to S4W-20327 refers to a previously answered question S4W-20084 on 20 March 2014, which provided information on how different tax revenue streams could be affected by an increase in female participation rate in Scotland to match Sweden’s. All answers to written parliamentary questions are available on the Parliament’s website, the search facility for which can be found at: http://www.scottish.parliament.uk/parliamentarybusiness/28877.aspx.

The Scottish Government modelled the impacts of increased female participation using a Computable General Equilibrium model of the Scottish economy. As outlined in the Childcare and Labour Market Participation – Economic Analysis paper, the increase in the tax revenues by £700 million that could arise from matching Sweden’s female participation rate would be expected to come from a range of different tax revenue streams. As highlighted in the paper, as individuals move into employment, or increase the hours they work, they would pay more tax through income tax and national insurance. In addition, as individuals’ incomes increase and their spending rises, receipts from indirect taxes such as VAT, fuel duty and excise duties would also be expected to rise.

The information on the component tax revenue streams that contribute to the £700 million is available in the Childcare and Labour Market Participation – Economic Analysis paper published in January 2014.

The Scottish Government estimates that the revenues from the specific taxes identified in the question would increase if Scotland’s female participation rate was to match Sweden’s. The total increase in all revenues would be expected to amount to £700 million in the long-term. Further detail is provided in the Childcare and Labour Market Participation – Economic Analysis paper which can be found at: http://www.scotland.gov.uk/Resource/0044/00441783.pdf.

As outlined in the Childcare and Labour Market Participation – Economic Analysis paper, the increase in the tax revenues by £700 million that could arise from matching Sweden’s female participation rate would be expected to come from a range of different tax revenue streams. Further detail is contained in the paper on pages 4-6.