THE Scottish government was urged yesterday to follow the lead of the Labour-led administration in Wales and cut support for tax-dodging companies.

Opposition parties at Holyrood have said businesses in Scotland that are registered in overseas tax havens must not receive financial support from the government.

Last week the Welsh government outlined plans to support companies struggling during the Covid-19 pandemic, which excluded those owned by a company or individual living in a tax haven will not be eligible for funding. 

The change will exclude a small number of large organisations, and the Scottish government has been urged to follow examples in Wales, as well as France, Denmark and Poland. 

Scottish Labour leader Richard Leonard said: “Substantial amounts of money are lost from national economies every year due to companies registering in overseas tax havens.

“After this crisis is over we will face a tremendous task to rebuild and reform Scotland’s economy.

“We cannot go back to ‘business as usual’ after this pandemic and, by taking this principled stance, the Scottish government can state clearly that the days of the state bankrolling tax-dodging companies at the expense of the domestic economy are over.

“By only providing support to companies that pay appropriate levels of tax, the Scottish government can ensure the money to support Scotland’s economy stays in Scotland and that businesses that operate ethically are incentivised.”

The MSP also said his party would back an amendment to the coronavirus emergency legislation proposed by the Scottish Green Party leader Patrick Harvie. 

The change, which will be debated this week, would see a similar approach taken to the Labour-led government in Wales. 

The Green’s No Coronavirus Bailout for Tax Avoiders campaign launched on Thursday, with more than 6,000 people having signed an online petition. 

Mr Harvie said: “The current crisis has had a significant economic impact and it is right that government makes support available to businesses. 

“It cannot be right however that such support is made available to companies that deliberately starve our public services of cash by setting up in tax havens to avoid paying tax.”

A Scottish government spokesperson said: “The Scottish government is committed to taking the toughest possible approach to tackling tax avoidance where we have the powers to do so.

“We are clear that government support should go to those who need it the most, and Ministers are listening to businesses and employees as we continue to explore how best to help during this unprecedented economic crisis and our total package of support now totals £2.3 billion.

“Our support, which is under constant review, is for businesses operating in Scotland and providing jobs. We strongly sympathise with the aims of the amendments submitted and are giving detailed consideration to the issue.”