Humza Yousaf yesterday raised the prospect of imposing a wealth tax to help fill a £1billion black hole in his spending plans.
The First Minister said "we shouldn't rule wealth taxes off the table" in the upcoming Scottish Budget thanks to the "extraordinary pressures" his government's finances are under.
In particular, he cited a recent STUC report that proposed raising £1.4billion per year by imposing a 1% annual tax on wealth, including property, pension pots and expensive possessions such as jewellery and art.
The Telegraph says that, if imposed on wealth above a £1million threshold, it is estimated that it would affect 12% of households, each of which would pay an average £8,000 per year.
Mr Yousaf said this would also help him afford extra spending on tackling poverty.
But he added that he could be forced to shelve proposals to raise Income Tax again on wealthier Scots if the Chancellor uses the UK Budget to cut the levy in England.'
Tax gap
The first minister said he would have to consider whether the cross-Border tax gap would grow so much that high earners would change their tax residence to south of the Border.
His intervention came the day after he pledged to be "unashamedly anti-poverty and pro-growth" as he unveiled his programme for government for 2024,
Mr Yousaf also raised fears on Tuesday that he was planning more income tax hikes for Scotland's middle classes, ordering Shona Robison, the Finance Secretary, to "further progress delivery of the most progressive tax system in the UK".
Ms Robison admitted in May 2023 that the Scottish Government's day-to-day spending "could outstrip our funding" by £1billion in 2024/25 rising to £1.9billion in 2027/28.
Asked if he would consider a wealth tax to help plug the gap, Mr Yousaf told journalists in Edinburgh yesterday: "I've said before when it comes to the issue of wealth taxes, and I refer back to some of the work the STUC has done on that in particular, I've said that we should give consideration when it comes to the really-tough financial constraints that we're under, that we shouldn't rule wealth taxes off the table.
"We haven't made a decision on them, but I equally haven't said that we shouldn't rule these matters out, because we are facing extraordinary pressures, and for anti-poverty organisations who want us to go further we've got to be able to find the finances and resources."