The biggest shake-up of income tax since devolution will take effect from today – hitting higher earners but leaving two-thirds of Scots paying less.
Both the higher and top rate of income tax will both be increased by 1p from April 1, 2018, rising to 41p and 46p respectively.
In addition the Scottish Government will levy a new intermediate rate of 21p on income between £24,000 and £43,430.
But the increase in the personal allowance – the amount people can earn before they start paying income tax – together with the introduction of a 19p “starter rate” on earnings between £11,850 and £13,850 means that most Scots will pay less in 2018-19 than in 2017-18.
Finance Secretary Derek Mackay said: “The new income tax rates and bands will make the system more progressive and deliver additional revenues to invest in public services and the economy.
“This progressive approach to reforming income tax will not only protect the lowest earning taxpayers, but ensure 70% of Scottish taxpayers pay less tax this year than last year for a given income, while the majority of Scottish taxpayers will pay less than if they lived elsewhere in the UK.”
But Scottish Conservative shadow finance secretary Murdo Fraser said: “This is a punishing move which businesses and experts right across the country warned against.
“It will reinforce Scotland’s reputation as the highest-taxed part of the UK, punishing hard work and aspiration in the process.”
Scottish Labour’s finance spokesperson James Kelly said: “These tax changes represent nothing but a missed opportunity caused by SNP complacency.
“SNP Finance Secretary Derek Mackay has done nothing but tinker around the edges, passing Tory austerity on to the people of Scotland.”