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P&R wants more time before States debate GST and other taxes

P&R wants more time before States debate GST and other taxes

Tuesday 26 April 2022

P&R wants more time before States debate GST and other taxes

Tuesday 26 April 2022


The Policy & Resources Committee wants to postpone a major debate on taxation from July until later in the year.

The Committee announced this afternoon (26 April) that it needs more time to carry out a review of taxes on companies before returning to the States' Assembly with proposals to deal with a projected shortfall in States’ finances of up to £85million a year.

In October last year, the States’ senior committee asked deputies to back a goods and services tax [GST] in principle but withdrew the proposal when it became clear during debate that it would be heavily defeated if pushed to a vote. Instead, the States approved an alternative proposal from the Committee to investigate other options, consult more and return to the States for another debate in July this year. 

Ahead of hosting a live public event about tax online this evening, the Committee released a statement in which it said that it was finalising an agreement for an external review of company taxation and was proposing to postpone the States' debate until the fourth quarter [October - December] of 2022.

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Pictured: Deputy Charles Parkinson is one of a number of deputies who had said they would not support increases in personal taxation until the Policy & Resources Committee had looked again at how much more revenue could be raised from company taxation.

"The review will provide a thorough assessment of plausible corporate tax options, looking at what potential they may have to generate additional revenues to fund essential services and whether they allow the Bailiwick to continue to compete internationally or if they would present risks for the local economy," said the Committee.

"It is now expected the review will be completed in the summer. As it is important its findings are made available before an informed debate is held, the Committee is proposing to postpone the debate until quarter four of 2022."

Earlier this year, the Committee launched ‘Our Island, Our Future’ – a campaign of engagement with the community to explain the need for tax rises and why it considers GST not only the most effective but also the fairest way of bringing in tens of millions of pounds of additional tax revenue each year. 

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Pictured: In line with much of the rest of the western world, the proportion of retired people in the Bailiwick is increasing, which is one of the reasons why the Policy & Resources Committee wants to raise additional revenue to fund public services and pensions in the future.

The Committee has also said that it is listening to the views of islanders who attend the various engagement events and that it remains open to alternative ideas for dealing with the projected deficit in the years ahead.

The Committee said today that it was also "mindful of the feedback from the community to take into account the considerations around population which are the focus of the ongoing population review, and the delay will allow for this work to be part of the public and political discussion on revenue-raising measures".

This further delay to any resolution of the ongoing tax debate was widely anticipated by other deputies and is likely to draw support, relief and criticism in equal measure.

The Committee said that it wished to avoid a long postponement and that "the debate should be held before the end of 2022".

"Already, the impacts of the changing population make-up are being felt, putting greater demand on health services and other costs, and there is an urgency in agreeing a long-term solution so that the detailed work on reforming the tax and social security systems can happen," said the Committee.

"That detailed work to develop and implement any changes that the States ultimately agree would take some time and so it is not anticipated that the changes would take effect for at least two to three years."

Pictured (top): Deputy Peter Ferbrache (left), President of the Policy & Resources Committee, and Deputy Mark Helyar, the Committee's Treasury Lead.

READ MORE...

States to host Facebook Q&A on tax review

OPINION: Why Guernsey needs to reform its company tax system

P&R could delay tax debate

FOCUS: Opposition across the States to P&R's latest GST plan

FOCUS: Further work on company tax as more deputies reject GST

P&R wants to win public support for GST ahead of summer debate

EXPLAINED: Why the States' leaders believe GST is needed now

Guernsey leaders abruptly pull GST plans

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