What are Guernsey's tax package options?

Politicians in Guernsey have published a total of five options to tackle the government's growing financial deficit.

The Policy and Resources Committee has shared three potential options in an effort to help solve the island's current 'financial black hole', the 'Fairer Alternative Group' lead by Deputies Heidi Soulsby and Gavin St Pier have put forward a fourth and Deputy Peter Roffey has suggested a fifth, to be considered if the States cannot agree on any of the other options.

P&R's suggestions aim to raise £85 million using both revenue raising measures and public expenditure reductions.

So, where are we now and what are the tax package options?

P&R's Tax Packages

Option A

• A new 15% Income Tax band on everyone’s income, up to £30,000

• A broad-based GST at 5%

• A restructure of Social Security contributions to give everyone an allowance

• £10m savings in public spending

Option B

• Raising an additional £34m through social security contributions

• A 50% increase in TRP

• Tax on transport, which may include a form of distance charging, motor tax or paid parking

• £16m savings in public spending

Option C

• Raising an additional £34m through social security contributions

• Cost cutting option

• Public savings

The Fairer Alternative Group has met with members of P&R and put together their own tax package - option D.

It is a two stage approach in the hope of a net improvement of around £50 million in the States' financial position.

The 'Fairer Alternative' option:

Stage 1

• Expenditure restraint

• Social security reform

• Revenue raising

Stage 2

• Controlling spending

• Alternative revenue sourcing, including corporation tax

Guernsey's next States sitting starts on Wednesday 15 February when the debate on a new tax package will continue.

There is now a fifth proposal - option E - which would also be done in two parts.

It has been proposed by Deputy Peter Roffey and is seen as a fallback to be considered if the States cannot agree on any of the other options.

The second stage would need to be approved by the Assembly of 2025-2029.

However, the first stage would be implemented by the current P&R Committee and would aim to raise £55m per year by 2025.

Stage 1

• Raise £20m from corporate taxes or charges.

• Increase motor taxes to generate £10m.

• Reform social security contributions to raise an additional £19m.

• Find savings within each States committee.

• Raise £6m from property taxes by focusing on larger properties.

Stage 2

• To be approved by the Assembly of 2025-2029.