Scotland could be forced to put up taxes if it wins independence in order to fill a black hole in its budget, experts have warned.
The Institute for Fiscal Studies, an independent think-tank, said that an independent Scotland could be forced by underwhelming oil revenue streams to impose "significant" tax increases to fill "a substantial fiscal gap".
This comes alongside a report from Glasgow University's Centre for Public Policy for Regions which warned that an independent Scotland would face greater fiscal pressure.
The CPPR said: “Unless conditions affecting the North Sea improve significantly for the better in the future, then moving to a position of independence would most likely lead to a small net loss in government funds.”
TOP STORIES TODAY
The IFS estimated that a one percent point hike in all income tax rates, or in the main value added tax rates, could raise about £430 million in Scotland. It calculated that £2.5 billion of tax rises, or cuts, would be needed during 2016-2017 and 2017-2018 to match the UK government's plans.
In order to offset an expected decline in North Sea oil revenues as forecast by the Office for Budget Responsibility by 2017-2018, the Scottish government would need to raise another £3.4bn, according to the IFS.
The IFS said: “There would be a strong case to focus taxes more on immobile tax bases such as property. This would involve a reversal of longstanding policy which has seen council tax rates in Scotland fall well below English levels.”