HUNDREDS of thousands of basic rate income taxpayers will pay more as a result of today’s Budget, Nicola Sturgeon has indicated.
The First Minister told MSPs that 70 per cent of Scotland’s 2.5m taxpayers would pay no more income tax in 2018/19, implying 30 per cent, or 750,000, faced higher bills.
As 2.2m taxpayers only pay the basic 20p rate, this suggests around 450,000 people will be pushed out of the basic rate into a higher rate.
Finance Secretary Derek Mackay is expected to introduce at least one extra income tax band in this afternoon’s Budget to raise more for public services.
Westminster is cutting Holyrood’s day-to-day revenue budget by £200m next year.
A new Scottish income tax rate between the basic 20p payable above £11,500 and the higher 40p rate which starts at £43,000 north of the border is one likely option.
The Scottish Tories said the SNP was planning to break its 2016 manifesto commitment to freeze the basic rate of income tax for all 2.2m low and middle earners.
Asked about the issue by Scots Tory leader Ruth Davidson at First Minister’s Questions, Ms Sturgeon said her government would seek to "protect those on low and middle incomes".
But she said there was also a need to "protect our vital public services".
She said: “I can tell the chamber that 70 per cent of taxpayers in Scotland - 83 per cent of all adults in Scotland - will pay no more income tax after this Budget than they do now."
Ms Davidson replied: “I asked her if she agreed with herself that ‘all people who currently pay the basic rate of income tax, which is 2.2m people in this country, shouldn’t have to pay more’.
“That was the promise that she made. Hasn’t she told at least some of them that she is breaking the promise?”
Indicating the SNP would have to compromise on its manifesto in order to strike a deal with one of the other parties to pass the budget in the New Year, the First Minister said: “We are a minority government. We are required to build consensus around our budget proposals.
“But of course we also have to deal with one of the most challenging economic and fiscal contexts that any government over the lifetime of this parliament has ever faced.
“As we heard confirmed just this morning by the Fraser of Allander Institute, our day-to-day spending is being cut in real terms by over £200m next year.
“Over the next two years Tory cuts will take £500m in real terms out of the spending that this parliament has available for our nurses, for our doctors, for our teachers and police officers.
“So it’s a bit rich for the Tories to come to this chamber and lecture anybody about public spending.”
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