Tax rises to stay in line with inflation for standstill Budget
TAXES on cigarettes, alcohol, petrol and property will rise only in line with inflation next year after deputies agreed that it was the wrong time to put extra economic stress on the public.
The States are close to approving the Budget for 2021 and have already thrown out attempts to put inflation-busting rises on tobacco and alcohol.
Setting out next year’s Budget, Deputy Mark Helyar, the treasury lead for Policy & Resources, said the over-riding ethos was to limit tax rises.
‘Undoubtedly there would have been an expectation that this Budget would have included revenue-raising measures, in other words increases in taxation, however, the committee does not believe that now is the right time and therefore unashamedly this Budget is a standstill Budget.’
An analysis of the impact that Covid-19 has had on the economy was given, with a figure of £170m. put on the black hole in the States’ finances for this year and next year.
While next year’s Budget has a soft touch with no spending cuts, there were plenty of warnings that belt tightening measures were likely in the years to follow.
Deputy Helyar said he would resist any attempts to put big tax hikes on the wealthy and the finance sector.
‘The less attractive we make the Bailiwick for investment whether by increased taxation, overzealous regulation, or by creating complex social legislation giving rise to high compliance costs – the more business will simply go elsewhere.’
Twelve amendments were placed on the Budget and only five were successful.
The one which caused the most debate was Deputy Peter Roffey’s motion to increase taxes on cigarettes and alcohol and divert the money into lifting the income tax allowances.
That amendment was comprehensively defeated after States members lined up to argue that it was an assault on the hospitality industry and a raid on some of the poorest and oldest members of society.
Two amendments to sustain the level of aid given to the world’s poorest were also defeated, meaning that the island’s Overseas Aid budget will be cut by 25% to £2.32m. next year.
In the States Pages 4 & 5