RADICAL plans have been unveiled which would give local authorities the power to scrap council tax and business rates and replace them with a range of other levies.

Reform Scotland is calling for an overhaul of how local government is financed, saying Scotland's 32 councils should be given complete control over local taxation via a raft of alternatives such as land value, sales and other property taxes.

Under its proposals, local authorities could set their own council tax and business rates or scrap them altogether and raise cash through other taxation.

The think tank said councils currently had had no real control over their own tax income for the past eight years and needed local fiscal freedom to deliver core services under mounting financial pressures.

Citing the OECD, it said countries of a similar size such as Denmark, Finland and Norway had substantially more tax income controlled locally and that devolving more financial powers to councils would makes them less dependent on central government grants.

The body added there would be no postcode lottery around local taxation "as councillors will quite clearly be accountable for the decisions they make".

In a new report, released today, it said: "Leaving aside the merits of particular small taxes such as bed taxes, Reform Scotland believes that local authorities should be able to introduce such taxes if they feel they are appropriate for their area. If the electorate disagrees, they can vote the councillors out."

Reform Scotland's report is being submitted to the commission looking at alternatives to the council tax, which has been frozen since 2007. The Commission on Local Tax Reform was established last year by the Scottish government and Cosla, which represents local authorities.

It has also been submitted to the Tories' own commission on local taxation and comes amid The Herald's series on the need for a review of how vital local services will be financed in the face of a massive financial squeeze.

It said the current system where the council tax was set centrally meant accountability for spending decisions made by local authorities was blurred as government ministers responsible for removing their ability to raise additional income could also be held responsible,

Also calling for the devolution of council tax and non-domestic rates in full, it said authorities would "have the ability to take local priorities and circumstances more fully into account", adding: "Crucially, this would be a decision about a local tax made by a local authority for its local area, taking into account local circumstances and priorities."

Reform Scotland director Geoff Mawdsley said: “Our local authorities have become powerless to make a real difference to their local communities because they have no real control over the amount of money they tax and spend.

"It is time to give them the ability to make a difference, and the starting point on the road to genuine local fiscal responsibility is to give councils complete control over council tax and business rates.

“Scotland is significantly behind other similarly-sized countries in the area of local devolution. The Scandinavian countries, for instance, have far more tax income controlled at a local level. Restoring genuine local fiscal responsibility should be our aim. Devolution was never supposed to stop at Holyrood."

A Scottish Government spokeswoman said: “Scottish Ministers consider the current council tax system as a whole to be unfair. That is why, along with our local government partners, we have established the cross-party Commission on Local Tax Reform to examine fairer alternatives.

“The Scottish Government awaits the Commission's report, which is due in the Autumn.”