THE SCOTTISH GOVERNMENT needs to "get to grips quickly" with its tax system for its devolved powers, according to ICAS.
Putting together an entire tax code for an independent Scotland could prove "massive, complex and expensive", the institute said in its paper, Scotland's Tax Future: The Practicalities of Tax Devolution, published this week.
Irrespective of independence, under the Scotland Act 2012, Holyrood has the power to set a new Scottish rate of income tax, devolve stamp duty land tax and landfill tax, and create new taxes.
It will also set up its own tax authority, Revenue Scotland, which could be in place as early as 2015.
The latest personal tax statistics, ICAS said, suggest that the top 1% of Scottish taxpayers paid income tax of more than £2.1bn in 2009/10, compared to the estimated total corporation tax collection for Scotland for the same year of £2.7bn and council tax of £1.96bn.
HM Revenue & Customs currently uses a data-mining approach to form a complete financial picture of a taxpayer's position.
The paper questions whether HMRC will have access to the same tax data from Revenue Scotland in relation to disposals of land under the proposed land and buildings transaction tax regime, the first tax of which Edinburgh will gain control.
The absence of that data could lead to Scotland being treated in much the same way as the Channel Islands as a place to shelter sales proceeds from HMRC, the paper warns.
Elspeth Orcharton, director of corporate and international tax at ICAS, said: "Any implementation of tax devolution requires data on not just current tax revenues, but also on taxpayer profile and behaviours, to know what tax revenues are actually generated in Scotland and on what.
"This is the data foundation for tax system design, which we would expect Revenue Scotland to adopt. This is required to inform the compliance and enforcement regime and the design of a penalty system, along with projections of future tax income generated for the Scottish coffers."
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