Guernsey Press

Sales and health taxes on horizon

THE spectre of new taxes, including a health tax and a sales tax, has been raised as the island’s senior committee publishes the Budget for 2020.

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Policy & Resources president Deputy Gavin St Pier. (Picture by Adrian Miller, 26004602)

Regardless, there will be increases in many of the taxes already in place.

The price of petrol will go up next year by just over 2p per litre, the cost of a packet of 20 cigarettes will rise by 37p, there will an extra 3p on a strong pint of beer, 10p on a bottle of wine, and 70p on a litre bottle of spirits.

Also, people who own big homes will have to pay inflation-busting higher taxes, and so will owners of commercial buildings.

Another key point is that Aurigny’s losses are forecast to be £9.6m. in 2020, and a new framework is likely to be drawn up to try to bring that deficit under control.

On the positive side, the personal tax allowance will go up by £575 to £11,575, and the island’s economy is performing much better than expected.

The overall picture is that it is a balanced budget, and all but 15% of financial requests from States committees have been met.

However, the current situation has been described by the financial experts as ‘unsustainable’ because of unprecedented pressures caused by growing demand, especially from the ageing demographic.

In announcing the £479m. budget, Policy & Resources president Gavin St Pier called for a major review of the island’s tax base.

‘The question of consumption taxes does need to be considered if we’re looking at the wider tax base,’ he said.

‘We’re not making any proposals in relation to that, but we’re certainly saying that consumption taxes are one of the things that need to be considered alongside possibly a designated health tax, given that most of the growth in spending in the last few years has come out of health and social care, so is that where the focus should be?

‘These are questions that we don’t have the answers to, but they’re questions that the community and the community’s representatives do need to debate and reach some decisions on.’

Deputy St Pier also outlined that most of the tax increases were targeted at those who have the greatest ability to pay, and he hoped the budget would go down well with islanders.

‘Perhaps the most significant budget change will be the increase in personal tax allowances. Over the last three years we’ve increased the allowances by over £2,000 per individual, so that’s a big tax reduction and has to be borne in mind.’

Budget in detail Pages 4 & 5

Comment Page 14

Inside Politics Page 25