Local authorities should be given the power to scrap council tax and business rates and replace them with alternatives, a think-tank has said.
Reform Scotland has proposed an overhaul of the way local government is funded, transferring control over taxation from central government to Scotland’s 32 councils.
The move would mean that local priorities and circumstances can be taken fully into account, the think-tank has argued.
Under its proposals, local authorities would be able to set their own rates for council tax and business rates, or abolish them completely and raise funds through alternative levies such as land value tax, sales taxes and other property taxes.
Reform Scotland said councils have had “no real control” over their own tax income for the last eight years and criticised any plan to “replace one centrally-controlled local tax with another, such as a centrally-set local income tax”.
The think-tank has submitted its proposals to the Scottish Government and Cosla commission on local tax reform, and to the Conservatives’ independent commission for competitive and fair taxation in Scotland.
Reform Scotland director Geoff Mawdsley said: “Devolution was never supposed to stop at Holyrood.
“However, Holyrood has reduced control in some areas that used to be local authority responsibilities, and one of those is local taxation.
“Scotland is significantly behind other similarly-sized countries in the area of local devolution.
“The Scandinavian countries, for instance, have far more tax income controlled at a local level. Restoring genuine local fiscal responsibility should be our aim.
“Our local authorities have become powerless to make a real difference to their local communities because they have no real control over the amount of money they tax and spend.
“It is time to give them the ability to make a difference and the starting point on the road to genuine local fiscal responsibility is to give councils complete control over council tax and business rates.”