Richard Murphy says a strong tax system is key to the success of Scotland’s currency

An economic justice campaigner has said Scotland needs to have a clearer and more efficient tax system than the UK if it is to adopt its own currency after independence.

On the latest IndyLive podcast, Professor Richard Murphy, who campaigns against tax avoidance and evasion, said that while there was “no question” that an independent Scotland would need to have its own currency, it must adopt a different policy approach to taxation than the current ‘light touch’ British government.

He insisted that a strong tax system would ensure that the country could deliver real social justice and reduce inequality.

“While there is no doubt in my mind that an independent Scotland must have its own currency, and must have it as soon as possible after independence, we must also address in this critical period between the announcement of independence and independence day how the Scottish tax system will work,” Murphy said.

“We can use the tax for the social benefit of a country that really wants to ensure social justice.

“I sincerely believe that is one of the main reasons Scots want to be independent is to get rid of the awful neoliberal mess they’ve had to live in for so long and if that’s , then my argument is that we need a strong and effective tax system in an independent Scotland not only to support the value of the currency – because that is what it will do – but also to implement the social and economic policies that will lay the foundations for true prosperity across Scotland in the future.

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Murphy – who has been a major critic of Government Expenditure and Revenue Scotland (GERS) figures over the years – claimed Westminster had underfunded HM Revenue and Customs since its creation following a merger between Inland Revenue and HM Customs and Excise in 2005.

The department now has just over 60,000 employees, down from 100,000 17 years ago when it was founded, he said.

He highlighted how he received a response last month to a letter he sent to HMRC more than three years ago, citing it as a sign of “how bad the service is”.

Murphy insisted that an independent Scotland must have a functioning revenue authority to ensure people pay their way, know where they stand and ensure that social and economic policies designed to improve society can be implemented. work.

Richard Murphy thinks Scotland, having a strong tax system, would lead to a fairer society

He added: “In the UK we have lived for a long time with governments that have been willing to step back, play a light touch on regulation and underfund HM Revenue and Customs.

‘I was there in 2005/06 when it was formed as a result of the merger between Inland Revenue and HM Customs and Excise, and there was a reason it was set up and that was to cut costs. There were 100,000 employees in 2006, now it’s around 60,000.

“I got a response to a letter the other day, it took three and a half years. That’s how bad the service is now.

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“We need a functioning tax authority in Scotland to give people certainty about their situation, to ensure that everyone pays the right amount of tax and to ensure that social and economic policies therefore that a country’s tax system is able to provide. It has to work well to do that.

Murphy – who spoke at the Scottish Sovereignty Research Group conference in Dunfermline last month – also explained how an effective tax system would secure the value of the Scottish pound.

He added: “One of the biggest questions I get asked is just how do we make sure Scottish currency is used? Why will people use it?

“People will have to use Scottish currency – if the Scottish government decides to have its own currency – for one simple reason and that is that the Scottish government will say you have to pay your tax using the Scottish pound, and because you have to pay tax bill in Scottish pounds, two things follow.

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“First of all, no company will take the risk of trading in another currency because the risk of trading in one currency and paying the tax bill in another will be too great, and the same is true with regard to people.

“So the reality is the main reason we need a functioning Scottish tax system is to force the use of Scottish currency in day-to-day operations and at the same time that tax system needs to be very clear and effective, much more i would suggest the UK system is currently only collecting around 90p in the pound of all that is due.

“What we need in an independent Scotland is strong macroeconomic control of Scotland’s economy because if it [the Government] was actually to say we want to make sure everybody pays their fair tax rate because we want a positive redistributive tax system that reduces inequality so he has to make sure everybody pays and that requires that Scotland has a very different political and economic approach to taxation.”

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