Scotland’s net tax balance has improved since last year, boosted by record North Sea revenues, as well as strong growth in income tax, national insurance contributions and VAT , the Scottish government said in a statement posted on its site this week.
The net fiscal balance is the difference between total revenue and total public sector spending, including capital investment, the government said in the statement. This balance stood at a deficit of 9.0% of GDP (GBP 19.1 billion [$24.35 billion]) in 2022/2023, the statement outlined. Excluding the North Sea, there was a deficit of 15.1 per cent of GPD (£28.5 billion [$36.34 billion]), the statement revealed.
Scottish public sector revenue was estimated at GBP 87.5 billion ($111.58 billion) in 2022/2023, and of this, GBP 9.4 billion ($11.98 billion) was North Sea revenue, the statement said .
Non-North Sea revenue increased by GBP 8.1 billion ($10.32 billion) in 2022/23, an increase of 11.5 percent, as income tax, contributions to the ‘national insurance, VAT and non-national rates, in particular, grew strongly, the release notes.
Scotland’s illustrative geographic share of North Sea revenue was GBP 9.4 billion in 2022/23, up from GBP 2.4 billion ($3.06 billion) in 2021/22, following the introduction of the Energy Profits Levy, according to the release.
Although there was a reduction in health spending related to the pandemic, overall spending increased, mainly due to increased interest spending on reserved debt and the introduction of cost of living support, indicate the government in the statement.
Total spending for the benefit of Scotland by the Scottish Government, the UK Government and all other parts of the public sector was GBP 106.6 billion ($135.94 billion), the statement said.
“Total revenue for Scotland increased by 20.7 per cent (GBP 15 billion [$19.13 billion]) compared to 11.3 per cent for the UK as a whole,” the Scottish government said in a separate statement published on its website on the same day.
“This includes an increase of GBP 1.9 billion ($2.42 billion) in Scottish income tax revenue and GBP 6.9 billion ($8.8 billion) in North Sea revenue. These increases are have been partially offset by increased spending on cost-of-living measures and interest payments on the UK’s public debt,” the government added.
In a statement, Cabinet Secretary for the Wellbeing Economy, Fair Work and Energy, Neil Gray, said: “I am pleased that Scotland’s finances are improving at a faster rate than the UK as a whole United, with revenues driven by Scotland’s progressive approach to income tax and our vibrant energy sector”.
“While record revenues from the North Sea show how much the UK continues to benefit from Scotland’s natural wealth, these statistics do not reflect the full benefits of the green economy, with hundreds of millions of pounds in revenue not yet captured,” he said. added
In a statement published on its site in August last year, the Scottish Government noted that its net fiscal balance was in deficit at 12.3 per cent of GDP (£23.7 billion). [$30.23 billion]) in 2021/2022. Excluding the North Sea, there was a deficit of 15.7 per cent of GDP (£27.2 billion [34.69 billion]), the statement highlights.
In this statement, Scottish public sector revenue was estimated at GBP 73.8 billion ($94.13 billion). Of this, GBP 3.5 billion ($4.46 billion) was revenue from the North Sea, that statement noted.
In June, in a statement published on its website, the UK government said the Energy Profits Levy, which it noted places a marginal tax rate of 75 percent on North Sea oil and gas production, will continue for the next five years. while oil and gas prices remain above historical norms. The government added that the tax rate will return to 40 percent “when prices consistently return to normal levels over a sustained period.”
In its statement, the UK government said the tax was put in place to tax windfall profits made by the industry following record high oil and gas prices fueled by Putin’s invasion of Ukraine. It is expected to raise nearly GBP 26 billion ($33.15 billion) by March 2028, the government revealed.
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