John Swinney has hit back at the suggestion Scotland will become a "less attractive" place to live and work following tax rises in the Budget.
The Deputy First Minister and interim Finance Secretary responded to claims by the Scottish Chambers of Commerce who said tax hikes for the wealthiest across the country would discourage investment into the economy.
Dr Liz Cameron, chief executive of the business network, said rises will not halt questions around "talent attraction, retention, consumer confidence and indeed departure of workers to other parts of the UK".
Swinney told MSPs at Holyrood on Thursday that the standard and basic rates of tax would not change. The higher rate threshold will be maintained and the top rate will be lowered to £125,140 from £150,000.
Both the higher and top rates of tax will be increased by 1p each, to 42p and 47p respectively next April.
Responding to the comments by Cameron, Swinney told BBC Good Morning Scotland: "I obviously understand the points that have been put forward, but I don't agree with them. I think people make much more rounded decisions about where they live and work.
"For example, people that live and work in Scotland will generally have a lower council tax than if they lived in equivalent places in England.
"People in Scotland have access to university education without having to pay tuition fees, which you know, the equivalent of that is £9,000 pounds a year south of the border. We have access to free personal care for the elderly in Scotland.
"We have free prescriptions available to people. We have a much stronger early learning and childcare offer in place in Scotland for three and four year olds and some two year olds compared to England.
"So there is a lot more people get from what we call the social contract in Scotland, which is the agreement between the government and the public about the range of provision we put in place.
"To make sure we can sustain all of these services we are asking some people in Scotland, that will be the minority, the majority of people in Scotland will not be paying any more taxation. So we're asking a proportion of the population to pay more in taxation to support those services."
The changes to income tax will raise £129 million next year, according to the Scottish Fiscal Commission, which released projections alongside the budget saying Scotland was already in recession and household incomes could see their sharpest decline since records began in 1998.
'Less attractive'
Following the Budget Cameron said Scotland would become a less attractive place to live and work, she added : “The Scottish Government’s move to increase the top and higher rates of income tax will hit taxpayers in Scotland more than other parts of the UK.
"This is a clear disadvantage for Scotland’s businesses and workers and could position Scotland as a less attractive place to live and work. With over 350,000 people alone in the higher rate bracket, questions remain on the impact this will have on talent attraction, retention, consumer confidence and indeed departure of workers to other parts of the UK.
"We urge the Scottish Government to publish its economic modelling of this policy decision, specifically on the proposed impact this could have on future investment decisions by companies."
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