The comments came at the conclusion of Sturgeon’s speech covering the Scottish government’s programme for 2017-18 setting out the actions for the forthcoming year, when she said it would look at the case for more progressive tax policies.

The move follows comments made during the election campaign, when Sturgeon raised the possibility of increasing the top rate of tax, introducing a 50p rate for those earning more than £150,000.

The discussion paper will include a review of the policies proposed by other parties. In the past, the Scottish Labour party suggested putting up income tax by 1p in the pound for anyone earning above £21,500.

The published programme states that ahead of publishing the draft budget for 2018-19, the government will publish a discussion paper on income tax ‘to open up the debate about the best use of our tax powers’. 

This will set out the current distribution of income tax liabilities in Scotland; analyse the implications of different options around income tax, including the proposals of other parties represented in the Scottish Parliament; and set out the importance of the interaction of income tax policy with the fiscal framework.

The paper will also provide international comparisons of Scotland’s income tax policy. Its aim is to ‘better inform the Parliament and people in Scotland about the choices open to us to invest in our public services and support the economy in the context of austerity and Brexit.’

Sturgeon said the Scottish government’s council of economic advisors has already been asked to look at how, and to what extent, the revenue risk associated with an increase in the additional rate of income tax can be mitigated. This analysis started earlier this year, and was focused largely on any increase to the top rate of tax.

The programme paper concludes: ‘In entering into discussions about the future of income tax, this government recognises that taxation must be used responsibly and progressively and that taxpayers value certainty. These principles will underpin our decisions.’

Other plans for the coming year include a Land and Buildings Transaction Tax (LBTT) Bill to give retrospective effect to the application of second home main residence relief in certain scenarios where spouses, civil partners or co-habitants jointly buy a home to replace a home that was owned by only one of them.

Tax bands and tax rate amounts for air departure tax ADT will be brought forward through secondary legislation. The Scottish government says it is committed to’ reducing the overall burden of ADT by 50%, abolishing the tax altogether when resources allow and seeking a fair deal for the Highlands and Islands, where an exemption from APD currently applies’.

Scotland’s new Land Commission, now a statutory public body, will be publishing a paper on land reform during the perod, reviewing tax and fiscal arrangements, including the potential for introducing some form of land value based tax in Scotland.

The Scottish government’s plans for the future also include action to phase out the need for petrol and diesel vehicles by 2032 and fast-track the development of a Scotland wide charging network. In addition, Sturgeon unveiled plans for a Scottish National Investment Bank to deliver long term financial support for innovative industries.

Last week a £45m boost for research and development (R&D) over the next three years was announced, focusing on funding for businesses to conduct new R&D projects, raising the existing pot by 70% over the period.

The government will also be making further commitments, to help Scotland capitalise on economic opportunities, including:

• extra help for the advanced manufacturing, energy and financial technology sectors;
• plans to support graduate entrepreneurs;
• support for companies to access finance; and
• plans to make Scotland an early adopter of electric and ultra-low emission vehicles.

A nation with ambition: the Government's Programme for Scotland 2017-2018

Report by Pat Sweet