Derek Mackay told MSPs he would take a “more progressive approach” than the Chancellor despite warnings that SNP policy is “disastrous” for the economy.
Following Mr Hammond’s Budget, the threshold at which workers in the rest of the UK pay the 40 percent rate will increase from £46,350 to £50,000 from April.
But the giveaway does not apply to some 370,000 Scots because this level is set by the SNP Government and is currently only £43,430.
Income above this level up to £150,000 is taxed at 41p in the pound, 1p more than in England.
A Scottish worker earning £50,000 already pays £824 more tax than a counterpart south of the border and the gap with the rest of the UK is likely grow further.
Even if the SNP increased the threshold in line with inflation, those earning £50,000 would pay £1,100 more in income tax than elsewhere, respected Fraser of Allander Institute think-tank has said.
Mr Mackay will unveil his draft Budget on December 12 and was yesterday told by the Scottish Greens to “resist” tax cuts if he is to again secure their support for his spending plans.
Responding to the UK Budget, Mr Mackay claimed the Tories had made cuts for the “richest in society”.
Around a million workers in Scotland earning more than £26,000 pay more income tax than those on the same salaries in England, following his shake-up of bands and rates last year.
But Mr Mackay said: “I take some pride in the fact that I have been a Finance Secretary who has ensured that we have the fairest income tax system in the United Kingdom. The majority of people in Scotland pay less tax, and Scotland is the lowest-taxed part of the UK. The Tories have once again chosen tax cuts for the richest people in society, but we will choose a fairer and more progressive path.”
The Greens’ co-convener, Patrick Harvie, later said: “Derek Mackay must resist delivering a tax-cutting budget for the wealthy, otherwise he must know a deal with the Greens would be impossible.”
Tories said the Scottish block grant will rise £381million, or 1.25 percent, in real terms next year, giving Mr Mackay scope to cut income tax.
In a reference to previous jokes about Mr Hammond’s reputation, Scottish Tory finance spokesman Murdo Fraser branded Mr Mackay “the new Eeyore in town” for complaining about being “short-changed” despite getting an extra £950million over three years.
He added: “The SNP must stop the shroud-waving and act. Scotland needs a competitive tax regime and the Scottish Conservatives will be demanding that the SNP delivers.”
Business leaders have already warned of a “brain drain” of talent amid the widening tax gulf while experts have said some Scottish taxpayers would be taxed at 53 percent on an “increasingly large proportion” of their income.
This is because they would be taxed at 41 percent by the Scottish Government and pay 12 percent for National -Insurance, which only drops to two per cent above the UK threshold.
Scottish Secretary David Mundell said: “I can’t understand why with one breath the SNP say they want to attract people to come to Scotland and then they follow it up by making Scotland the highest-taxed part of the UK.
“That is a disastrous approach for our economy and as they have demonstrated with their high stamp duty tax, it ultimately leads to a reduction in revenue and people voting with their feet.”
Source : EXPRESS