Scotland Holds Income Tax Steady After Gaining New Raising Power

Scotland’s Finance Secretary John Swinney held local income-tax levels steady in a draft budget for 2016-17, the first since he was handed new powers to set a separate rate from the rest of the U.K.

The 10 percent level of the new Scottish Rate of Income Tax, unchanged from the amount previously paid by residents, was set under controls devolved to the government in Edinburgh in 2012. They don’t allow the authority to vary the tax rate across different income bands, unlike the new Scotland Bill currently going before the U.K. Parliament.

“The income tax powers we currently have do not allow us to make income tax fairer, and I will not penalize the poorest taxpayers,” Swinney told the Scottish Parliament in Edinburgh on Wednesday.

The Scottish National Party, led by First Minister Nicola Sturgeon, surged to its best-ever result in a U.K. election in May, taking 56 out of 59 districts to become the third-largest group in the House of Commons, after a campaign focusing on opposition to U.K. Prime Minister David Cameron’s budget cuts.

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