The powers devolved to Holyrood by Smith Commission will not allow Scotland to make any meaningful reform, according to an independent think-tank.

Reform Scotland said the new income tax powers due to be transferred to Holyrood from next year under the Scotland Bill were not sufficient to allow for coherent tax reform.

Their report highlighted that after the latest Smith Commission round of devolution, 71% of all tax revenue raised by the Scottish Parliament will be from the single source of income tax.

In terms of fiscal levers, Holyrood will control less than 30% of the total tax income raised in Scotland, while the benefits to be devolved amount to less than 15% of the total welfare expenditure north of the border.

Consequently, the report concludes that there is little, if any, point in Holyrood setting the rate of income tax at a different rate to that in the UK as a whole until the Scottish Parliament receives further tax powers.

Chairman Alan McFarlane said: "The reality is that the new tax and welfare powers proposed by the Smith Commission and now being enacted at Westminster are not likely to allow for real reform.

"The devolution of income tax is a blunt instrument which does not offer the opportunity to create a better environment for economic growth.

"Until the Scottish Parliament has control over a sufficiently varied basket of taxes, we would call on the Scottish Government to peg income tax in Scotland to the UK rate.

"Similarly, we believe a further devolution of welfare powers is required to enable any meaningful welfare reform."

The think tank has also called for one Scottish department to be responsible for the new tax and welfare powers and for reform of the "unnecessarily complex" administration of carer's allowance.

A Scottish Government spokesman said: "The Scottish Parliament recently agreed with the Deputy First Minister’s proposal to set the Scottish Rate of Income Tax at 10p for 2016/17. This is the same as those taxpayers in the rest of the UK. The income tax powers we currently have do not allow us to make income tax fairer.

"We believe Scotland needs full economic powers, beyond those in the Scotland Bill, if we are to fulfil the country’s potential. In terms of the tax powers which are being devolved, we will set out our proposals in due course."

Jackie Baillie, Scottish Labour spokeswoman for public services and wealth creation, said: "The new powers coming to Scotland gives us the chance to do things differently.

"The SNP are cutting hundreds of millions of pounds from schools and local services across Scotland, cuts that will harm our economic growth for years to come.

"Faced with the choice between these damaging cuts and using the powers of the Scottish Parliament Labour would use the powers and invest in our future."