Scotland's tax system is not fit for the future and needs to be completely redesigned, according to a new report from a think tank.Reform Scotland argues tax revenues will need to increase in the next few years to meet ongoing pressures driven by population ageing and to fund the up-front investment needed to mitigate climate change.A report said the scale of revenues required means that the "traditional tweaks" - such as to income tax or national insurance - will not be sufficient.READ MORE: Nicola Sturgeon claims Boris Johnson tearing apart the UK by denying independence referendum Heather McCauley, report author, said the tax system will need to be completely redesigned, rather than simply tinkering with the rates of current taxes.She said: "Scotland will face increasing pressure on its public finances in the coming years, both as a result of global issues such as climate change and the pandemic recovery, but also because of local issues such as Scotland's demographic challenge."Inevitably, higher tax revenue will be required to deal with this.
In order to create the right environment for optimal tax raising, debate in Scotland needs to focus as much on the way money is raised as it does on the way money is spent."Having studied tax systems in similarly-sized countries across the world, from New Zealand to Scandinavia, it is clear to me that the current structure of Scotland's tax system is not fit for the future."In short, Scotland needs to start again.
It needs a new and fairer tax system, focused more on immobile tax bases such as wealth and less on mobile ones such as employment income."This new system needs to be used to drive sensible and sustainable increases in overall tax revenue to cope with the challenges
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