This week saw the publication of the latest set of proposals for reimagining the way we pay tax and social security in Guernsey. Here, we recap the headlines in a nutshell.
The plans for reforming personal taxation policies were published on Monday.
They were published online, through the local media, via leaflets delivered to each household and a live-streamed public meeting was held.
The States proposals can be read HERE.
The public meeting can be watched HERE.
The headline proposals for reorganising Guernsey's decades old tax and social security systems include a cut in income tax rates, an increase in personal allowances, and an allowance introduced for social security contributions.
Income tax would be cut from the standard 20p in a pound paid on most earnings. P&R suggests this is reduced to 15p in the pound, on all income up to £30,000.
Tax allowances would be increased by £600 per person if the plans are approved.
An allowance for social security contributions is suggested, and it could be introduced at the same level as income tax allowances which are currently around £13,000 each.
Social security contributions could rise to 8.5% for employees, 8% for employers and 14.5% for the self-employed.
These will be offset by a goods and services tax at 5%. P&R says GST would be charged across nearly all purchases - including food. Very small businesses would be exempt from introducing the charge to keep the administration costs as low as possible.
Pictured: Goods and services would be charged at 5% under the P&R plans.
P&R says the package of measures it is proposing would help balance the books while protecting public services.
P&R says if the above measures are introduced it would bring in an additional £55million per year.
This would go someway to balancing the books, but with a projected deficit of £85m each year, there would still be a gap.
P&R says of the additional £55m income each year, around £23m would come from households, £27m from businesses and the remainder from visitors and other non-residents.
The Committee insists that its tax package is fair and progressive and that the overall impact would benefit many with most families better off.
Each of us 'cost' the island an average of £11,000 per year for the public services we access. With a population of approximately 63,000, this means the annual of maintaining public services is nearly £700million.
A person earning £37,000 per year - which the States says is the average taxpayer on median earnings pays substantially less tax than the average cost per person of running the island's public services at around £7,000, including all taxes and social security contributions.
It's said that the most affluent 40% of households in Guernsey would end up paying more for their goods and services across all sectors.
Pictured: Different case studies have been presented as part of the proposals.
The P&R Committee will take their proposals to the States in January. 20 or more of the 40 States members will need to agree before the proposals can be progressed.
P&R will tell the States that severe cut backs will be imposed if the tax changes aren't agreed. The cut backs could include closing a primary school, cutting funding for the Guille Alles Library, reducing bus services, and stopping public gardening services such as at Candie Gardens and around town.
If the States do approve the plans, P&R said the changes could be in place before the next general election which is due to be held in June 2025.
Express has been told that a number of deputies are planning amendments to the proposals, with further information expected at the details are formalised.
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