Entrepreneur Zef Eisenberg highlighted the ‘pain’ faced by the middle class after Policy & Resources president Gavin St Pier acknowledged that some islanders had been ‘remorselessly squeezed’ over the past decade.
Mr Eisenberg, who sold his Maximuscle business for £162m. in 2010, also said that research by the Open Market Forum had shown that Guernsey was the most uncompetitive jurisdiction when it came to tax when compared to offshore competitors, with the findings set to be shared with officials.
‘The concern is that there appears to a growing group of deputies in the States which don’t seem to understand the importance of what Guernsey stands for, and how it became successful and created what it has today,’ he said.
Highlighting a fear that the ‘golden goose’ could be killed, Mr Eisenberg added: ‘On top of that we hear the growing pains of the middle class with an ever increase of TRP, the rubbish, the bin taxes, all these small taxes across Guernsey – which together is painful and adds up.’
He asked how ambitious plans to improve the island would be funded during a question and answer session with Deputy St Pier during the Chamber of Commerce’s regular lunch.
‘It strikes me that the whole argument with GST might come around sooner than later unless we all want to increase the taxes from bottom to top.’
Describing it as a ‘fair challenge,’ Deputy St Pier said the island had one of the lowest tax takes of any jurisdiction within the world when compared internationally.
‘The question is where does that tax fall and that takes us back to the question about GST.’
The States of Guernsey had decided against proceeding with GST in 2015 amid a personal tax and benefits review, said Deputy St Pier.
However, that decision was taken in the knowledge that the island’s tax base was ‘over-reliant on a single source of income – namely the taxation of personal incomes through income tax and social security’.
‘That completely skews the playing field in terms of how we share the burden amongst the community. You’ve spoken about the middle classes. I spoke to that as well. I think it is important that we do recognise that many in our community who have felt very squeezed for the past decade,’ added the president of P&R.
‘Part of the reason for that is because of the decisions that the States have made in how it wants to raise revenue from the public, in particular with this very narrow tax base. I would say that was a decision taken at the time with the support of chamber.’
Earlier during his address to the event, Deputy St Pier said: ‘I’m also acute aware that we must recognise and, if possible, address the fact that many in our community have felt remorselessly squeezed over the last 10 years since the global financial crisis.’
The P&R president highlighted action taken to prepare Guernsey for a range of challenges, including Brexit and meeting European Union economic substance requirements, as well as addressing concerns over transport links and investing in the island.
‘What does this all mean for our economy? It means we can continue to offer stability, security and certainty in a time of global turbulence. It means our tax competitiveness remains undiminished,’ said Deputy St Pier.
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