States of Guernsey announce 2% rise to income tax in government budget proposals

States of Guernsey believe a 2% increase in the individual standard rate of income tax for the limited period of two years would raise additional revenues of £34m per annum. Credit: ITV Channel

Guernsey earners will pay an additional 2% on their income tax if the States of Guernsey's budget proposals are approved.

The increase will be a temporary measure for two years under proposals published today (Tuesday 8 October) by the Policy & Resources (P&R) Committee.

It comes as the States originally forecast that they would be operating at a surplus of £11.4 million in 2024.

However, this has turned into an expected deficit of £24.4 million.

P&R believes the income tax rise will raise additional revenues of £34 million each year.

The Committee has also proposed several measures they claim will protect lower and middle earners, including increasing the personal income tax allowance, and freezing alcohol duty.

The personal income tax will rise to £15,000 - a rise of £1,100 from the current level.

"[Our proposals] will give the new Assembly time to agree on a solution to the long-term financial challenges." Deputy Lyndon Trott Credit: ITV Channel

P&R President, Deputy Lyndon Trott, claims that this budget is not just "balancing the books", but focussing on investing in what he describes as Guernsey's "ageing infrastructure" and stabilising the States' financial position.

He explains: "While it would have been easier for our Committee to propose a minimalist, steady as she goes Budget that made few waves as we head towards an election, it would have also been the irresponsible thing to do.

"We cannot in good conscience knowingly leave public finances in such a challenging state for our successors to pick up.

"We must collectively take action and we believe our package of measures will be easily understood by the community, are forthright in their intentions, and will raise the money we need in the short term while protecting the lowest income households."

More updates from Guernsey's 2025 Budget to follow...

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