Scotland’s economic recovery from the impact of the coronavirus restrictions should include a “fundamental examination” of taxes and support focused on low income, young and less-educated workers, Holyrood’s Finance Committee has said.
It is “highly likely” that Covid-19 pandemic has worsened structural inequalities that already existed in Scotland, according to the committee.
As part of efforts to recover from the economic damage caused by lockdowns and restrictions, MSPs on the committee have said there must be a “fundamental examination” of Scotland’s tax system and a “national conversation” about potential reforms.
They also recommend targeting support towards younger workers, those on lower incomes and people with less formal education.
Commenting on the publication of their budget report, convener Bruce Crawford said: “Our committee recognises that it is highly likely that Covid-19 has exacerbated existing structural inequalities; with people on low or precarious incomes, with fewer employment rights, facing the harshest of consequences.
“The pandemic has also had a devasting impact on the economy with some sectors and businesses being hit harder than others.
“Our view is that a fair, economic recovery from Covid will require a particular focus on supporting lower-income, less educated and younger workers into the labour market.
“It should also help them progress up the labour market while driving up standards of pay and workplace rights.
“If the reduction in jobs in hospitality and non-essential retail is to become a permanent feature, support for training in other sectors and industries is also likely to be important.”
He added: “We now consider that a fundamental examination of what the Scottish tax system is designed to achieve must be undertaken.
“In particular, it should look at the role of tax policy in achieving a just, sustainable and strong economy as we recover from Covid-19.
“This would include the breadth and nature of the tax base, the impact of economic activity on the size of the tax base, and the relationship between local, Scottish and UK-wide taxes.
“The committee’s view is that this requires a national conversation jointly led by the government and parliament and which includes a wide range of voices across Scotland.”