The growing economic gap between the UK and other advanced economies means that there is also a tax gap, making it challenging to fund good public services
If Scotland had matched the average for small advanced economies in 2019 that would have added £26 billion in tax revenues. This matters for the quality and quantity of public services such as health and education, because these are funded from tax revenues, which are collected from money generated in the economy each year.
This is very significant in the context of Scotland’s reported Current Budget Deficit of £12 billion in 2019-20 (that is the estimate of the gap between taxes collected in the year and current public spending). Closing the tax gap would not only eliminate a budget deficit, it would provide the opportunity to increase public spending and / or cut tax rates.
Closing the tax gap would not happen overnight if Scotland became independent. However, independence for Scotland would mean realising the agency required to be more ambitious, taking control and responsibility to address economic problems and pursue opportunities. As this tax gap analysis has shown, the potential benefits for the economy and the public finances are substantial.