The Scottish Government’s proposals for updating council tax are mere “tinkering” and “effectively pointless”, a leading Scottish economic thinktank has said.

Reform Scotland said the consultation on increasing bills for better-off homes was a missed opportunity when replacing the tax in its entirety was required.

Ministers are seeking views on whether to raise the relative tax bill on Band E to H homes by between 7.5% and 22.5% next year to raise £175m, a move which also happened in 2017.

The exercise ends on Wednesday.

Council tax was brought in by John Major’s Tory government in 1993 after the disastrous poll tax ended Margaret Thatcher’s time in No10, and is still based on 1991 property values.

The SNP came to power in 2007 promising to scrap the “unfair” council tax and replace it with a local income tax, but immediately ran into problems with the plan.

Besides being beyond Holyrood’s powers, it would have raised £1billion less than council tax and would have taken eight years to introduce - if Westminster changed the law to allow it. 

However SNP ministers maintained it was still viable, and froze the council tax as an interim temporary measure, but one which ultimately lasted nine years.

READ MORE: SNP ministers were warned flagship tax plan was beyond Holyrood's powers

First Minister Humza Yousaf now speaks about reforming council tax rather than replacing it.

In its submission to the current consultation, Reform Scotland said: “Rather than take the opportunity to consider radical reform of our outdated local tax system, this consultation is little more than tinkering round the edges.

“This is a very narrow review of one aspect of the existing regime. No alternatives are discussed. Reform is not offered. No explanation is offered as to why the Scottish Government is refusing to address a tax which it deems to be unfair and outdated.

“Changing any tax regime will always cause ‘winners and losers’, but leadership requires

the willingness to make difficult decisions.”

The thinktank said councils should have “complete control over their local tax”, including the ability to replace council tax with another form of local taxation, such as a land value tax.

“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 - a truly local tax,” it said.

Research Director Alison Payne said: “The replacement of council tax with a fairer, localised, bespoke set of local taxes has been talked about by most political parties for most of the era of devolution. Why, when those parties are in power, do they do little about it, instead issuing consultations which are effectively pointless?”

The criticism echoes that of the Institute of Fiscal Studies (IFS) last week, which said the consultation was a “small step in the right direction” but ducked major reform.

READ MORE: Scottish Government 'ducking' key council tax reform, warns IFS

It criticised ministers for failing to undertake a long overdue revaluation of properties, despite more than half of homes thought to be in the wrong band and thus paying the wrong bill.

SNP public finance minister Tom Arthur said: “Longer term reforms to the council tax system are being considered by a joint working group on local government funding, chaired by [councll umbrella body] Cosla and the Scottish Government.”