More than two thirds of income taxpayers will pay less tax next year on their current income, Finance Secretary Derek Mackay has confirmed as MSPs prepare to debate proposals to reform income tax in Scotland.

Mackay said the new starter rate of income tax, combined with an increase in the personal allowance, will result in 70% of all income taxpayers paying less tax than they do this year on current incomes and raise additional revenue to support vital public services and investment in the economy.

If backed by MSPs, the Scottish Government’s use of the devolved income tax powers will ensure an additional £428m in 2018/19 to support a budget that will protect public services that are free at the point of use, including free prescriptions, free personal care and free tuition; will increase the health budget by £400m and will provide above-inflation investment in the police, in universities and colleges and in local government services.

Finance Secretary Derek Mackay said: “The Scottish Government has faced continued austerity from the UK Government. Over a ten year period, Scotland’s block grant will have been cut by £2.6bn in real terms and we face a £500m real terms reduction in spending on day-to-day services over the next two years.

“Our progressive approach to reforming income tax will deliver greater tax fairness and protect the lowest earning taxpayers in Scotland. By using our devolved income tax powers we will ensure we have an additional £428m next year to support a Budget that will help mitigate UK budget cuts, protect our NHS and other public services, support our economy and tackle inequality in our society.

“This is an important day for Scotland’s future and I hope parliament comes together to back our proposals and set income tax rates that will help deliver the best outcomes for the people of Scotland.”

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