The Deputy First Minister of Scotland Shona Robison has announced a new 45 per cent tax band.
The advanced tax band will be set at 45 per cent and affect individuals earning more than £75,225 a year.
Furthermore, the top tax of tax, levied on people earning more than £125,140 a year, will rise by one percent in 2024 to 48 percent.
The three lowest tax rates will not be hiked, while the starter and basic bands will rise in line with inflation.
Ms Robison outlined the Scottish Government's Budget plans for 2024
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Shona Robison said the Office for Budget Responsibility (OBR) projection for inflation for 2024 will be three percent.
However, Ms Robison said she wanted to “go further than that” with her plans for country’s finances.
She said: “That’s why I will fund an above inflation five per cent council tax freeze – delivering over £140million of additional investment for local services.
“Combined with the other support being provided to local government, this will increase their overall funding by six percent since the last budget, taking local government funding to a new record high of over £14billion.”
Prior to today’s announcement, there was widespread speculation that the SNP-led Scottish Government would introduce a new tax band.
The implementation of this rate comes as both Governments in Westminster and Holyrood attempt to address a huge squeeze in public finances.
Speaking to the press outside RAF Lossiemouth earlier this week, Prime Minister Rishi Sunak described the prospect of more tax rises in Scotland as “disappointing”.
He referenced the upcoming cut to the rate of National Insurance contributions which he claims would save households a considerable amount.
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Higher earners are set to pay more in Scotland
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Mr Sunak stated: “The UK Government has provided a record amount of funding to the Scottish Government through the Barnett formula, so they’re ultimately responsible for the finances here in Scotland.
“But I can tell you what we’re doing in the UK is controlling spending and cutting people’s taxes and that’s going to kick in for everyone in Scotland and across the UK, a reduction in the rate of national insurance from 12 percent to 10 percent from January.
“That will save a typical person in work around £450 – it’s a significant tax cut.”
The cut to the National Insurance rate will come into effect in the New Year.