Exclusive:Holyrood elections 2026: SNP minister signals income tax cut ahead if John Swinney's party is re-elected
‘We have reached trigger point with higher taxes’ says Ivan McKee
Public finance minister Ivan McKee has signalled that a re-elected SNP government would look to cut income tax in Scotland.
He told a hustings organised by Edinburgh Chamber of Commerce, in association with The Scotsman and the Edinburgh Evening News, that although the SNP manifesto talks only about simplifying the tax system and not increasing the rates or bands, people could "read between the lines".
He rejected suggestions that higher taxes for higher earners was deterring individuals or companies locating in Scotland. But he said the government recognised it had now reached the "trigger point" where further income tax rises could risk putting people off.
Mr McKee said: "We have made a commitment to simplify the tax system and not increase any rates or bands, so if you read between the lines on that then that does mean we will be potentially looking at some changes in terms of things aren't going to go up and they are going to be simplified and you can reach your own interpretation."
He said when the policy was launched it had been put to First Minister John Swinney that if taxes were going to be simplified and there were not going to be any increases that must mean they would be going down, through the simplification process.
Asked if that was what he expected, Mr McKee said; "Yes, exactly." He continued: "So when that happens will obviously depend on circumstances. So that's the direction travel."
He said the government watched closely the figures on cross-border movement to understand the impact of tax rates. "We're very conscious of understanding where those trigger points are and I think we're clear we're at that point and any further in that direction would potentially take you into a place where you would start to see those effects.
"But we haven't seen those effects yet. In fact, if you look back over the last number of years, despite the tax increases, there has been about 20 per cent more working age people moving from south of the border to north of the border than moving in the other direction in any given year.”
Asked after the hustings whether the plan to lower income tax implied that the decision to raise it had been a mistake, Mr McKee said: “The tax position has generated a lot of revenue which is used to support public services, but we also recognise there is a cost of living challenge.
“And if you look at what we did last year, it's important to recognise the UK Government froze all thresholds right across the piece; we increased significantly the thresholds at the starter and basic level, so we were doing what we could there to help those that are on lower incomes. We also increased the number of people that were paying less tax in Scotland than they are in the rest of the UK from 50 to 55 per cent.”
And he argued tax was not the only factor for people considering a move to Scotland. “More people are moving to Scotland and there are many reasons why they want to come here. If you look at the manifesto there's a commitment in there to focus specifically on what we would need to do to attract even more people to support Scotland's key growth sectors and that isn't a simplistic tax cut. That’s about highlighting opportunities there are here - business opportunities, career opportunities and the social contract that can put a lot of money in people's pockets by means other than tax cuts.”
Earlier, Lib Dem candidate Jane Alliston Pickard told the hustings an offer by Scots entrepreneur Sir Tom Hunter to fund a review of the tax system should be accepted.
She said: “We're kind of running an experiment at the moment, to create a tax system which is more complex. It's early days. There needs ideally to be a separate review, take it out of the political system and look at what it's really doing positively and where, at the edges, it may be putting off people from locating here.
"I know of people having moved to Copenhagen which has much higher tax rates, so I don’t believe tax is such an offput - but you have to wrap around quality of life and delivery of services as well.
“Tom Hunter has offered to pay for an investigation into tax, an independent review of an effective tax system for Scotland. We would absolutely sign up for that because we don’t want to run an experiment for too long or politicise it. We want to have an effective, clear, meaningful tax system.”