A ROW over changes to income tax in Scotland erupted today after Labour warned that public services will suffer under the SNP plan — and chief executives will pay less tax.

Speaking ahead of a vote in the Scottish Parliament this Tuesday on income tax rates, SNP Finance Secretary Derek Mackay argued his party’s strategy was moving Scotland towards a “more progressive tax system.”

He said: “The Scottish Budget proposes an additional £2 billion of investment. It provides an increase of almost £730 million for health and care services, more than £180m to raise attainment in our schools and gives a vital boost to our economy through a £5bn infrastructure programme.

“And it does so in the context of continuing UK austerity and against a backdrop of uncertainty around Brexit.”

Under the SNP’s plan, tax rates will remain the same in 2019-20. The starter and basic tax thresholds will rise in line with inflation, which the Scottish government says will protect lower-earning taxpayers.

The higher rate threshold, after which taxpayers pay 41p in the pound, will stay at £43,430 —effectively a tax rise once inflation is accounted for.

But Scottish Labour called for a new 50p top rate of tax to fund investment.

"The SNP-Green budget is set to cut funding for councils by £230m, that will put services like schools and social care at risk,” the party’s finance spokesman James Kelly said.

“It’s disgraceful that the budget leaves chief executives and Scottish ministers paying less tax while vital services face the axe.”

The vote on tax bands comes ahead of a final vote on the Scottish budget on Thursday.