Guernsey's Chief Minister warns a proposed income tax rise is not a long-term solution

Guernsey's Chief Minister says the proposed 2% increase in income tax is not a long-term solution but a necessary move to fight a financial situation which has "deteriorated".

Deputy Lyndon Trott warned States members today (5 November) in a debate on the 2025 Budget that not increasing income tax for the next two years would add extra pressure to public finances which already contain a £24 million black hole.

Deputy Trott said: "Politics is a journey and we've all been on that journey and as the fiscal position has deteriorated, the arguments have been more accurately articulated around what we don't get if we starve our economy of investment.

"I think more and more people have realised that this just can't go on and one of the most striking statistics is the fact that we spend 14% less on a per capita basis on public services here in Guernsey than our nearest neighbour and closest friends in Jersey.

"These are stark statistics that are accurate and can't be ignored."

Deputy Trott's Budget currently faces 22 amendments put forward by States members.

The first amendment to be discussed was one from Deputy Charles Parkinson, who wants to see changes to Guernsey's corporate tax system.

Deputy Parkinson said: "We have loaded so much tax onto the shoulders of the middle classes in Guernsey that people are really struggling and it's not fair because some companies are paying nothing.

"Unfortunately, some very rich individuals are using companies to shelter their income and they're paying nothing as well, so that just increases the burden further on the ordinary people of Guernsey - it's just not fair."

Deputy Parkinson's amendment was defeated by 21 votes to 14 this morning.

The 2025 Budget is due to be debated in the States until Thursday 7 November.

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