Minister responds to Scottish Government's Corporation Tax paper
Michael Moore welcomes Scottish Government paper which recognises some of the difficulties of聽devolving corporation tax
Responding to the Scottish Government鈥檚 discussion paper on Corporation Tax published today, the Secretary of State for Scotland Michael Moore said:
鈥淲e welcome this contribution to the debate.
鈥淭he Scottish Government鈥檚 paper accepts a lot of the difficulties that have been flagged up by ourselves and others. It accepts that devolving and cutting Corporation Tax will lead to a drop off in Scottish tax revenue. It also recognises the administrative complexity, extra costs and other problems such as profit shifting that need to be considered very carefully. The Institute of Chartered Accountants for Scotland and Price Waterhouse Coopers have highlighted some concerns over the past week and I am pleased that the Scottish Government recognises that problems do exist.
鈥淭he Treasury recently estimated that cutting Corporation Tax to the same level as Ireland would mean a drop in Scottish tax revenue of up to 拢2.7bn a year. At the time I said it raised serious questions about how such a cut would be financed and the Scottish Government鈥檚 paper puts it rather well聽when it confirms that 鈥榙ecisions regarding budgetary priorities would be needed鈥�.
鈥淚n looking at what the Scottish Government鈥檚 proposals, the UK Government is clear that it will not support anything that would expose the Scottish budget and economy to unreasonable risk.
鈥淲e should not forget that the UK Government is already in the process of cutting Corporation Tax to the lowest level in the G7, from which businesses across Scotland will benefit. The Scottish Government support this action but seem unduly concerned about who cuts the tax rather than what the tax level is.
鈥淭he UK Government will continue to contribute to this debate while awaiting the Scottish Government鈥檚 final submission later this year.鈥�