A private in the Army could see the amount he contributes to local taxation rise from £33 a year to £600 if an SNP plan to replace the council tax with a local income tax in Scotland becomes a reality, it was claimed.

Bob Ainsworth, the Armed Forces Minister, said that the introduction of a local income tax would have a damaging impact on service personnel in Scotland and could lower morale.

Mr Ainsworth, in a letter to John Swinney, the SNP Finance Secretary, said that Ministry of Defence ministers felt that the local income tax (LIT) would be more unfair in its impact on the Armed Forces than the poll tax.

Under the SNP proposal, the tax would be set at 3p in the pound, replacing the current council tax system. Servicemen and women currently have their council tax paid by the MoD, which takes a deduction from their pay by way of a contribution.

Mr Ainsworth said that the charges paid by privates would rise from £33 a year to £600, an army warrant officer's payments would increase from £84 a year to £1,570 and a navy commander would have to pay £2,924 per annum instead of £113.

“We have approximately 13,000 service personnel based in Scotland with approximately 4,500 moves into and out of Scotland in each year,” Mr Ainsworth said in the letter. “We cannot quantify the cost of necessary changes to our payroll system without details of the system you are proposing to introduce. But it should be compared with the introduction of the poll tax, which required the establishment of a new administrative team. The money required to fund this new bureaucratic overhead would reduce the resources that we can get to frontline to support our Armed Forces.”

A local income tax, said the minister, would be levied on the operational allowance paid to Armed Forces personnel on deployment to theatre.

“It is hard to express how badly this would hit the morale of Scottish troops, who would know that they are receiving a lower allowance because of the local income tax you proposed to take,” he told Mr Swinney.

A spokesman for Mr Swinney said that, given the MoD's many failures to look after the welfare of soldiers and veterans, the attack on the LIT proposals was particularly unfortunate.

“The Scottish government's absolute commitment to helping our Armed Forces personnel and their families and Scotland's veteran community was demonstrated by the measures we announced last week to boost their entitlement in health and social care, education and training, transport and housing. In a number of respects, these go further than provision south of the border.

“We will consider all the responses to our consultation on local income tax and bring forward our detailed proposals in due course for Scotland's Parliament to decide - not the MoD.”

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