What new tax powers came to Scotland in 2016?

In April this year a Scottish Rate of Income Tax was introduced. It meant that...

• of the 20p now being paid from £1 of basic rate income, 10p of that is going to be levied by the Scottish Parliament
• and that 10p amount could be varied up or down.

Image source, Getty Images

In February this year, Scotland's then Treasury Secretary, John Swinney, choose not to vary the figure. And why not? Well, the minister believed the new power was inflexible as he will not have full control over bands and rates of tax.

In April 2017, the Scottish Parliament  will get the power to set the rates and bands of income tax on non-savings and non-dividend income

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SNP MSP Stuart McMillan says the SNP believe in a fairer tax policy.

Mr McMillan accuses the Tories of flip flopping on APD.

He accuses the Tories of "staggering hypocrisy".

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Labour MSP Richard Leonard says the only industrial policy of the Conservatives is a tax cut.

Mr Leonard says that fiscal imperative sets to damage the social fabric, but is also dismal economics.

He says the Labour party is prepared to act against austerity.

In November, the Scottish government's adviser on poverty said taxes need to rise if the gap between rich and poor is to end.

Naomi Eisenstadt was speaking on the final day of BBC Scotland's week-long Unequal Scotland? series.

Image source, Getty Images

She wants inheritance tax to go up, councils given flexibility to raise taxes and increased tax on the wealthy.

In response, the UK government said it had given the "lowest paid a pay rise" and the Scottish government said it was "making taxation fairer".

Ms Eisenstadt has spoken in the past about putting up taxes.

Image source, bbc

Conservative MSP Alison Harris says the Scottish government are taking decisions that are both damaging to families and businesses.

Ms Harris says growth and GDP in Scotland are barely half of that of the rest of the UK

She says low tax rates have helped transform the Irish econmy.

Ms Harris says business is listening to the SNP plans with alarm.

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SNP MSP Ivan McKee says the Tory motion simply states that Scottish taxation policy should be no higher than the rest of the UK.

Mr McKee says the motion seeks to undermine the concept of a distinct Scottish approach to taxation.

He says Scotland throught the ballot box has backed a distinct Scottish path.

Scottish Labour MSP Jackie Baillie says the parliament now has more power than ever before and now is the time for "real grown up politics".

Ms Baillie says the Tories campaigned against devolution and devolution was about getting the opportunity to do things differently.

The Labour MSP says it is about time the Tories respect devolution.

Mr Baillie says it is "really audacious" to suggest APD is a major cut and, in that, the Tories and SNP are in alliance.

She says the economy is stagnating and the rate of growth in Scotland is less than that of the UK.

Ms Baillie says "Derek Mackay does not need to be Scrooge at Christmas" and reminds him that any cuts will be SNP cuts. 

The SNP-led Holyrood administration said it would not adopt the UK government's plan to take anyone earning less than £45,000 out of the 40p tax rate. However, it does not intend to increase the 45p rate currently levied on those earning £150,000 or more a year in Scotland.

A Scottish Conservative-appointed commission argued that the total tax burden should not rise any higher in Scotland than it is in the rest of the UK. It backs the UK government's approach to thresholds.

Scottish Labour has put on record that it does not want to see the 40p tax threshold change north of the border. This is at odds with the UK party which has not objected to the Conservative government's proposal.

Scottish Labour has also made clear that it wants to put 1p on tax rates in order to raise money "to protect public services". It said it could give a rebate to those earning less than £20,000. In addition, it would like to see the highest rate of tax - affecting those earning more than £150,000 a year - raised from 45p to 50p.

The Scottish Liberal Democrats want a similar penny increase as Scottish Labour, aimed at protection of education spending. It also says it objects to the 40p threshold change.

The Scottish Greens say there should be new rates and bands to give a tax cut to those on lower than average incomes and workers on higher wages should pay more tax.

Image source, Thinkstock

Mr Rennie says he believes there needs to be investment to match the challenges in Scottish education.

The Scottish Lib Dem leader says the Conservatives present themselves as a low tax party.

He says, however, the party supports stealth taxes.

Mr Rennie says he rejects the Tory motion today.

He says they are wrong when saying all tax rises are negative.

The Scottish Lib Dem leader says he does favour cutting taxes for those on low and middle incomes.

Mr Rennie says, however, not all taxes are bad as they pay for public services.

He says income tax should be raised by a modest one penny for education.

The Lib Dem MSP says we have these powers coming down the track and we should use them to boost education.

Scottish Liberal Democrat leader Willie Rennie begins by saying he likes Murdo Fraser.

He is greeted with Tory calls to "stop there".

Mr Rennie says Mr Fraser is just as good as Phillip Hammond, if not better

However, Mr Rennie says he cannot believe Mr Fraser wants  Mr Hammond to set Scottish income tax rates.

Here is the Lib Dem amendment. 

Image source, Scottish Parliament

Mr Harvie says the Scottish government does have the ability to stop higher rate tax payers from getting additional tax breaks and therefore generating income.

The Scottish Green co-convener says some are struggling to get by during this festive period. 

"It is scandalous," he says. 

Mr Harvie reminds Mr Wheelhouse that it is not only the SNP that has to live with the consequences of Derek Mackay's decisions, everyone in Scotland will have to.

The Scottish Green Party co-convener says beyond tax principles and revenues there is a need for progressive tax policies.

Scottish Greens Co-convener Patrick Harvie says he welcomes the fact that the Scottish Parliament can finally hold this debate.

Mr Harvie says a "locked in race to the bottom" is what Mr Fraser is arguing for.

He says the SNP's plans involve a very modest increase in revenues and, he says, it may be less than the SNP are predicting.