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Details of proposed reforms to Guernsey's tax systems will be published in November, and if they are not approved by the States in January then services will start to be switched off.
The Treasury lead, Deputy Mark Helyar, and Chief Minister, Deputy Peter Ferbrache, both said that the island has to stop 'kicking the can down the road'.
In presenting their 2023 Budget this week, it was confirmed that States spending will increase by £50million over the next year, but that comes with a warning of future tax rises or service cuts.
The Treasury Lead, Deputy Mark Helyar told Express that since he was elected two years ago, the island's financial situation has worsened, and it had started off in a worse place than he had expected when he was first able to see the island's accounts.
P&R President, Deputy Peter Ferbrache told Express the financial situation the island is facing is the worst it has been in living memory.
Pictured: Deputies Peter Ferbrache and Mark Helyar.
Deputy Ferbrache said the time has now come for the States to make a committed decision to changing the island's tax structure or services will be cut.
With the debate on tax looming in January and the details being published next month he said they can't kick the can down the road any longer.
"At the end of that debate, we've got to have a plan. If the States kick it down the road, then we're in trouble.
"We've got to go to departments then and say, 'ok, what's it look like if you cut your services by 5%, 10% or whatever it may be. For some it will be easier but let's say you go to Health and say you've got to cut your services by 5%, it will be very difficult."
Pictured: Could GST be on the agenda for debate in January?
Previewing the tax debate in January, Deputy Ferbrache warned the States will have to make a decision.
"This is the biggest decision in January, that I think the States are going to have to make, in fiscal terms, for a very long time.
"If they're not prepared to make it because they're worried about their election prospects in June 2025 then oh dear, oh dear."
Express asked Deputy Ferbrache outright if GST will be the proposed solution to the island's financial difficulties.
"You'll find out, I'm not allowed to say, yet anyway."
The tax review proposals will be published towards the end of November, for debate in January.
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