Civil society campaign says radical measures are needed to fix the country's broken public finances
Scotland’s devolved tax system must be overhauled to build a fairer, more prosperous and sustainable future for all.
The country’s party leaders are being urged to unite and take bold, immediate action.
In an open letter, Tax Justice Scotland, a newly formed campaign group which represents over 50 Scottish civil society organisations, economists and academics, says that Scotland’s existing tax system is undermining public services while exacerbating economic and wider inequalities.
They say it’s time to break free from short-termist tax policymaking.
Campaigners say that a fairer, more effective devolved tax system is needed if the Scottish Government is to deliver on its legal commitments to cut child poverty and tackle climate change, while avoiding damaging cyclical emergency budget cuts.
Ahead of the publication of Scotland’s new Tax Strategy and the 2025/26 Scottish Budget, the Tax Justice Scotland campaign is warning Scotland’s finances are “beyond breaking point”, while urging leaders to “stop dodging the hard but necessary decisions” on tax reform for future stability.
The letter states: “Scotland’s finances are beyond breaking point. Tweaking the status quo on tax is not working; it's failing our communities, our economy, and our planet. Inaction will condemn current and future generations to deepening inequality, crumbling public services and environmental collapse. But you have the power to choose a different future.
“To do so, you must choose to move beyond inadequate tweaks to our flawed tax system. It’s time to think beyond the narrow constraints of budget and electoral cycles to deliver a better and fairer tax system while ensuring those with the broadest shoulders carry the greatest weight of change.”
While the recent UK Budget will boost public spending and somewhat ease immediate finance pressures in Scotland, this won’t put Scotland’s public finances on a sustainable path. The campaign is urging the Scottish Government to leverage the upcoming Tax Strategy as a catalyst for overdue and essential long-term reform.
Tax Justice Scotland also sets out a series of immediate steps the Scottish Government should take, using devolved powers, to make progress towards a fairer tax system:
- Launch an immediate nationwide property revaluation, the first critical step to finally scrapping the outdated and unfair Council Tax. At the same time, ministers must start the search for fairer, more equitable alternatives.
- Kick-start a bold plan to tax wealth more fairly, ensuring those with the most contribute their share to Scotland’s future.
- Make polluters pay for the damage they cause while encouraging greener, fairer business practices, including through reforms of existing non-domestic rates and tax breaks.
Speaking on behalf of Tax Justice Scotland, Lewis Ryder-Jones, Oxfam Scotland’s Advocacy Adviser, said: "Scotland’s finances are perpetually teetering on the edge of a perilous precipice. Poverty and inequality are rampant, public services are badly stretched, and the climate crisis is escalating. Fairer taxes, alongside a fairer economy, and ensuring public money is well spent, can and must do more to secure a fairer, greener future for everyone."
Tax Justice Scotland has been established to build public and political pressure for tax reforms in Scotland, as part of improved UK and global tax systems.
The letter coincides with growing global momentum on tax, with the leaders of G20 governments endorsing a ground-breaking commitment to cooperate on taxing the world’s super-rich at a summit in Brazil last week.
Bold, well-designed changes to devolved taxes could build on this global momentum, unleashing more resources to invest in healthcare, education, social security and climate action while reducing the widening gap between the wealthy and the rest of society in Scotland.
Ryder-Jones added: “Scotland can lead the way in the UK and internationally. It’s time for our leaders to stop dodging the hard but necessary decisions, and instead start making the case that fairer taxes are good for the economy. We need grown-up tax governance that takes Scotland’s future seriously; moving beyond piecemeal, patchwork fixes and instead delivering a tax system that works for everyone, not just the privileged few.”
Tax Justice Scotland’s Steering Group includes: Oxfam Scotland, STUC, Poverty Alliance, Child Poverty Action Group in Scotland, Scottish Women’s Budget Group, Stop Climate Chaos Scotland, The Jimmy Reid Foundation, Scottish Community Development Centre, One Parent Families Scotland, Friends of the Earth Scotland, Save the Children Scotland, Health and Social Care Alliance Scotland, Scottish Women’s Convention, Disability Equality Scotland, Homeless Network Scotland and the Wellbeing Economy Alliance Scotland.
