AN extra £3.3billion could be raised to help fund Scotland's public services if a wealth tax was introduced, a fresh study has claimed.

The Scottish Trades Union Congress (STUC) commissioned a report - entitled Scotland Demands Better: Fairer Taxes for a Fairer Future - which lays out how the Scottish Government can raise additional cash through income tax reform, a long-term council tax replacement, and a wealth tax.

The report - written by Howard Reed of Landman Economics - suggests £1.3bn of reforms could be in place by April next year and, together with future wealth, land reform, and property taxes, the Scottish Government could raise £3.3bn by 2026 with its current powers.

It comes as the government prepares to reveal its Budget for 2023/24 on December 15.

STUC general secretary Roz Foyer said the organisation would work with MSPs to deliver on the proposals.

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She told the National's sister paper: “Ahead of the Scottish budget, we’re imploring the Scottish Government to end the excuses and finally deliver for Scotland’s public service workers. Our paper shows them exactly how to achieve that.

“These are costed, bold and progressive plans that need a progressive government to implement them. Devolution cannot be used to deflect.

"These proposals can be achieved – here and now – with the powers that currently exist to our parliament and we will work with the Scottish Government to achieve them.

The National: Roz Foyer says the proposals are within the Scottish Government's current powers Roz Foyer says the proposals are within the Scottish Government's current powers (Image: Newsquest)

"By April next year, we can fundamentally reform income, council and LBTT [Land and Buildings Transaction Tax] in Scotland to raise an additional £1.3billion. By 2026 this rises to £3.3billion by introducing targeted wealth, property, and land value taxes.

"Our movement has mobilised throughout this crisis, campaigning and winning better pay for workers. We’ve now shown politicians how that can be afforded."

The costed package of tax increases involves raising £1.426bn through an annual wealth tax with a 1% charge made on total household wealth above four different threshold points - ranging from £1 million to £10 million.

Reed said in the report: "The wealth tax has the advantage of good revenue-raising potential and being progressive with respect to both wealth and incomes.

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"The main drawback is that it requires updated valuations of property and also valuations of other forms of wealth.

"The requirement for a new administrative system for valuing wealth means that there would be an inevitable delay before a wealth tax could be introduced in Scotland. A timeline from initial proposals in early 2023 to introduction in the 2026/27 tax year seems reasonable."

A further £450m would be raised by replacing council tax with a proportional property tax where households pay a percentage of the value of their property each year.

The report states £112m could be raised from increasing the Additional Dwellings Supplement - charged if you buy an additional residential property in Scotland - while £240m could be raised from increases to Land and Buildings Transactions Tax. 

The proposals have been welcomed by train drivers' union ASLEF, which has already argued for a wealth tax to be introduced.

"We are pleased the STUC has carried out this detailed work looking at how the Scottish Parliament can use its powers to raise taxes to invest in our public services," said Kevin Lindsay, ASLEF Scottish organiser.

"In our Vision for Scotland’s Railways publication last year we made the case for a wealth tax and are delighted that the STUC has laid out in detail how a wealth tax could and should be introduced, how it would be administered and how much it would raise.

"Set against the current economic challenges facing people across Scotland, at the same time we see wealth growing for a few, creating a wealth tax is an obvious lever that the Scottish Government has at its disposal and we urge them and every other Political Party in Scotland to get behind this proposal laid out today by the STUC."

A Scottish Government spokesman said: “We have already delivered the fairest and most progressive tax system in the UK, while raising extra revenue to invest in public services and Scotland’s economy.

“The Scottish Government is committed to a fairer, more inclusive and fiscally sustainable form of local taxation.

“Decisions on tax policy for 2023-24 will be taken as part of the Scottish Budget on 15 December.”

The full report can be seen here.