Mr Kelly says his party has proposed a taxation plan to create an extra £960m because that is what is required.

He says: "What we have heard from Mr Mackay is a litany of excuses as to why he can't increase tax."

The Labour MSP says the finance secretary did not have the political will and has only "tinkered around the edges".

Mr Mackay asks if Mr Kelly is suggesting he should interfere with the Scottish Fiscal Commission's forecasts.

Mr Kelly says if the finance secretary disagrees with the forecasts he could commission his own.

He says there is £56m less to spend on the NHS and invest in public sector services as a result.

Image source, bbc

In December we reported that Scotland's economy was facing "subdued" growth over the next five years, according to the Scottish Fiscal Commission.

The independent body had predicted the Scottish economy will grow at less than 1% per year until 2022.

Its five-year forecast suggested GDP growth will be 0.7% in both 2017 and 2018, rising to 1.1% in 2022.

It said the outlook was "driven by slow productivity growth and exacerbated by demographic challenges".

Labour MSP James Kelly says Derek Mackay's income tax plans fall way short of what is required.

Mr Kelly says: "These tax proposals should be rejected because the SNP have failed to make the changes that would make a difference to people's lives."

He says local government have faced cumulative cuts of £1.5bn, all as a result of SNP decisions.

The rate resolution does not address the scale of the problems faced by Scotland's communities, he says.

Mr Fraser highlights the subdued growth forecast by the SFC at the time of the publication of the budget.

The Tory MSP says an expanding economy could avoid the need for tax rises.

Today's increase in income tax, in this rates resolution, penalises hard working families and breaks an SNP manifesto promise says Mr Fraser.

He calls on Parliament to reject the Scottish Rate Resolution.

Changes to the Scottish Government's budget will raise an extra £62 million, the Scottish Fiscal Commission has confirmed.

The independent body has published official forecasts for income tax revenue, updated to reflect revisions to the 2018/19 tax and spending plans approved by MSPs last month.

The extra revenue comes from a change to the higher rate threshold and the extension of the public sector pay rise.

Image source, Getty Images

An anomaly in the draft budget proposals from December would have seen those earning between £43,525 and £58,500 paying less tax rather than more.

Finance Secretary Derek Mackay said this would be addressed by changing the higher rate threshold to £43,438 rather than the £44,274 that had originally been proposed.

The commission forecasts the move will raise a further £55 million, taking the total additional revenue raised by the final income tax policy to £219 million.

The extension of the Government's public sector pay policy to apply to 75% of public sector workers is forecast to raise a further £7 million in income tax.

The Tory MSP says ordinary working families will be paying more in Scotland.

Mr Fraser says he is pleased the UK and Scottish governments have found a solution to the issue of the married couples allowance.

He says it was down to his party to clear up the SNP's mess around this issue.

The impact of the finance secretary's tax rises on the economy concerns Mr Fraser.

He says his party has warned repeatedly about Scotland looking like a high taxed economy.

Mr Fraser says the UK Conservative government is being three-and-a-half times more generous to the low paid than the Scottish government.

The Tory MSP says everyone earning more than £26,000 will pay more tax than if they lived south of the border.

He says 45% of taxpayers will be paying more than their equivalent south of the border.

Conservative MSP Murdo Fraser says the SNP rates resolution, if passed at decision time, will break its manifesto commitment not to increase the basic rate of income tax.

SNP MSP John Mason says a minority government cannot implement all of its manifesto commitments.

Mr Fraser says his party would have joined an alliance with the SNP to meet this commitment, to some amusement in the chamber.

He says there has not been one apology from the SNP benches.

Mr Fraser says Mr Fraser's plans will make Scotland the highest taxed part of the UK.

Image source, SFC

Here is the revised forecast from the SFC., external

On 31 January 2017 during the Stage 1 debate on the Budget Bill, Finance Secretary Derek Mackay announced spending changes and his plans to amend the Budget Bill at Stage 2 accordingly.

Mr Mackay said he planned to raise additional income tax receipts to fund these spending changes.

In the Draft Budget proposals, a higher rate of tax was set at 41% on earnings between £44,273 and £150,000.

This higher rate threshold will now start on earnings above £43,430, and is expected to result in additional revenue of £55m relative to the plans in the Draft Budget.

Image source, bbc

The Scottish Fiscal Commission’s revised forecasts were published on Tuesday 6 February.

Mr Mackay says the Scottish Fiscal Commission forecasts show growth in income tax receipts year on year.

The finance secretary says the government's decision on public sector pay will boost income by £62m.

He says over a ten year period, Scotland's block grant will have been cut by £2.6 billion in real terms.

This is not the time to increase tax for those at the lowest end of the earnings table, he says.

Mr Mackay says he believes his plans will make Scotland a more attractive place to live and work.

That's a darn good question.

Non-savings, non-dividend (NSND)income tax rates and bands are proposed in the draft Budget document and passed by the Scottish rate resolution.

Stage 3 of the of the Budget Bill cannot begin until the Scottish rate resolution motion is agreed by Parliament.

So this debate is as crucial as the final debate on the Budget Bill, so best buckle up.

Click here for the Scottish government's details on its budget., external

Finance Secretary Derek Mackay says those Scottish tax payers with the broadest shoulders will be asked to pay more to help services in the country.

Mr Mackay says the Scottish Fiscal Commission has stated the tax impact on the economy will be negligible.

He says decisions over the income tax base remain reserved to Westminster and calls for full powers over income tax.

Mr Mackay says the tax decisions he has taken has enabled him to reverse the real terms cut to the resource budget imposed by the UK government.

The finance secretary says the government has been clear in its ambition that income tax should be fair and progressive.

He adds that his plan will provide an additional £420m next year.

The most significant change is the move to a five-band income tax system.

Scotland currently has three income tax bands - a 20p basic rate, a 40p higher rate kicking in at £43,001 and a 45p additional rate for earnings over £150,000.

Image source, bbc

The budget redraws the system by adding a 19p "starter" rate and a 21p intermediate rate, while adding 1p to the higher and additional rates to create a five-band system.

The new starter rate, combined with the increase to the tax-free allowance, means many Scots will actually pay less than they do in the coming financial year than they do right now.

Overall, 70% of Scottish taxpayers will pay less, while 55% will pay less than they would if they lived elsewhere in the UK. That does, of course, mean 30% will pay more than they did last year - and 45% will pay more than they would if they lived south of the border.

Mr Mackay says: "For the majority Scotland will be the lowest taxed part of the UK."

Tory MSP Murdo Fraser calls for an apology for the basic rate income tax payers who will pay more.

The finance secretary says he is surprised Mr Fraser does not welcome Scotland being the lowest taxed part of the UK.

Finance Secretary Derek Mackay says today the Scottish Parliament will vote to set all the bands and rates for Scotland's income tax.

Mr Mackay says he is clear the proposals pass the four tests set by the Scottish government.

He calls on MSPs to back his motion.

The minister insists the new income tax system will be fairer and more progressive.