That is the view of senior paid officials at Scottish Borders Council, in evidence to the commission set up by the Scottish Government to come up with a fairer form of local taxation and due to report later this year.
In a submission on behalf of SBC’s corporate management team, chief executive Tracey Logan asks the commission to carry our more detailed research on other forms of local taxation, including land and tourism taxes.
While she concedes that local income tax is “workable”, she warns: “People may object to paying higher levels of taxation based on their income for access to the same local services.
“It is debatable whether collection levels would match those of a property-based tax and the costs of implementation, policing, compliance and ongoing collection may militate against its effectiveness as a source of funding local services.”
Highlighting the potential impact of a local income tax on the Borders, Ms Logan states: “As the tax is on people and not property, there is a danger it will be seen as an additional tax, rather than replacing council tax… making it less attractive for potential and prospective residents as well as businesses.
“There is a risk people, especially those near the border, would migrate into England for financial benefit.
“Many young people living in the Borders who do not currently pay council tax may consider leaving if the impact of a local income tax on take-home pay is significant and is not a factor in England.
“Students who are currently exempt from council tax may find themselves paying tax on part-time earnings and this may have an impact on where they choose to study as well as where they work after graduating.
“Businesses may look to relocate elsewhere due to higher personal taxation, higher taxation for their employees and the administrative complication of two tax rates.”
Conceding that council tax needs “reform and modernisation”, Ms Logan suggests several improvements, including a wholesale property revaluation, the amendment of existing council tax bands and the lifting of the eight-year freeze “to ease the pressure facing local government services, particularly in the Borders with respect to the increasing number of old people requiring care.”
She stresses that council tax is “very stable, has high collection levels and low collection costs and is generally accepted and understood by large sections of the local electorate.”