Views sought on devolved tax to encourage sustainable construction

Views sought on devolved tax to encourage sustainable construction

The levy aims to support the circular economy

The Scottish Government has launched a consultation on a new devolved tax that it said will encourage greater use of recycled and other sustainable materials by the construction industry.

A replacement for the UK Aggregates Levy, the Scottish Aggregates Levy would be payable when newly quarried products like sand or rock are used for commercial purposes including housebuilding, infrastructure and landscaping.

The Scottish Government intends the levy to support the circular economy by encouraging use of recycled aggregates in the construction industry and supporting innovation.

The consultation seeks views to help inform the Scottish Government’s final approach to the Scottish Aggregates Levy Bill, outlining key arrangements for a future tax. It invites comments on a range of issues including:

  • the rationale for and scope of the tax and whether exemptions and reliefs should be included in legislation
  • operational arrangements, including how best to make use of online technology
  • the case for introducing a new sustainability fund and what type of projects such a fund could aid

Public finance minister Tom Arthur said: “The extraction and production of aggregates like crushed rock and sand creates and supports jobs, including many in our rural communities. However, we know that extraction of new materials can also have an environmental impact.

“These proposals are intended to drive up recycling and reuse rates, helping the construction industry meet its climate and sustainability commitments, and protecting Scotland’s natural environment by reducing the need for virgin materials.

“It will also support our ambitious National Strategy for Economic Transformation objectives for green and sustainable economic growth and result in a greater proportion of the Scottish Budget being directly raised in Scotland.

“I want to ensure this tax is well-designed, takes full account of the Scottish context and maximises opportunities offered by devolution. I would encourage all interested people and organisations to respond to this consultation.”

Collection and management of the devolved tax will be administered by Revenue Scotland. The Scottish Fiscal Commission estimates that the 2022/23 Scottish share of revenue from the UK Aggregates Levy is £59 million.

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