Salmon Scotland joins in tax protest

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Industry body Salmon Scotland is among 16 Scottish business groups jointly writing to Deputy First Minister & Finance Secretary, Shona Robison MSP to protest against a potential tax hike announced in the Scottish budget.

Proposals for a new “business rates surtax” on retail premises selling alcohol or tobacco were outlined in documents for Scotland’s 2023/24 budget. The move is seen as a tax-raising measure that would also aim to improve public health, but retailers have warned that the sector would need to raise an extra £1bn annually to cover the cost of the new levy.

The joint letter to Shona Robison comes ahead of the expected Stage 1 debate and vote on the Scottish Budget at Holyrood later this week.

The trade bodies, which also include the Scottish Retail Consortium, Scottish Financial Enterprise, the Scotch Whisky Association and the Scottish Chambers of Commerce, say in the letter that they were “dismayed” to hear about the proposed tax.

The letter goes on: “It is profoundly concerning that new taxes on business are being countenanced in such an arbitrary way and with apparently little regard to trading or economic conditions. We understand it is being considered to plug a gap in government finances.

“The way the announcement was made falls well short of the thrust of the New Deal for Business, which talks of no surprises and involving business at the very inception of policy development. It contradicts New Deal commitments on a more competitive and less complex business rates system. It also reinforces the perception that Ministers view rates more as a revenue generator and less as a means to stimulate much needed commercial investment and growth.”

Deputy First Minister & Finance Secretary, Shona Robison MSP

While recognising that some positive steps have been taken on business taxes over the past few years, the letter also notes that rates in Scotland for the more than 22,000 medium-sized and larger commercial premises are set to reach a 25-year high in April.

The letter warns: “Businesses make investment decisions based on the opportunities ahead but also the costs of operating and predictability of tax and regulatory decisions. A more ad hoc and less predictable approach to business taxes in Scotland sends out a poor message. We fear this move opens the door to other sectors being similarly targeted, particularly if the projected fiscal gap widens.”

The surtax is also opposed by the Union of Shop, Distributive and Allied Workers (USDAW), the union representing retail workers. Tracy Gilbert, USDAW Regional Secretary for Scotland said: “The Scottish Government should be making it as easy as possible for retailers to invest and create good jobs in Scotland, not making it more difficult with the threat of a costly new business rate surtax. This arbitrary move could exacerbate the challenges facing retail. It could well have significant unintended consequences particularly if it impacted on the amount available to retailers to invest in training budgets or colleague bonuses.”

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