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Remit of the Local Government Finance Review Committee (LGFRC)

To review the different forms of local taxation, including reform of the Council Tax, against criteria set by the Executive, to identify the pros and cons of implementing any changes to the local taxation system in Scotland, including the practicalities and the implications for the rest of the local government finance system and any wider economic impact, and to make recommendations.

Core Issues for systems of Local Taxation

The issues that the review will need to examine for each system are:

• Effect on the economy /economic growth
• Ability to pay / fairness
• Ease of avoidance / collectability
• Stability / predictability
• The relationship to the Benefits system
• Balance of Funding
• Buoyancy
• Accountability
• The cost of collection
• Who collects the tax
• Shift to a new system: timing and transitional arrangements

Systems to be examined

• Council Tax (current and reformed)
• Local Income Tax (locally and nationally set)
• Land Value Tax
• Options for local business taxation
• Any other appropriate models

The associated issues to be addressed

The associated issues are:

• Business rates
• The impact on the current GAE/RSG system
• The mechanism for distributing grant between authorities.
• The relationship to domestic Water and Sewerage charges
• Reserved issues