GST is ‘not the answer to island’s financial problems’
BUSINESS leaders have said that GST is ‘not the answer’ to Guernsey’s financial problems, and that a temporary increase in income tax would be a more ‘palatable option’.
The Confederation of Guernsey Industry believes that a hike in income tax over a limited term would get a better reaction from islanders, particularly business owners who face having to deal with the set up and administrative costs of a GST.
David Newman, the chairman of the CGi, said it acknowledged the impact of the pandemic on funding and reserves.
‘We believe that the existing income tax system offers a simpler way to increase revenue and fund the costs of Covid.
‘This could be quickly, efficiently and cost-effectively implemented over two or three years.
‘We have always maintained that GST is not the answer.
‘When it was previously raised as an option by the States the CGi spent a lot of time and money investigating the feasibility of its introduction.
‘As it is a completely new tax it requires investment on the part of businesses and the States to both set up and administer.
‘And it is also regressive.’
Policy & Resources has come up with three options to raise more money – a 3% income-based health tax, a 5% GST, or an 8% GST.
The CGi has been polling its membership of large and small local business owners for their input, and those results will be published in due course.
In a previous poll, CGi members indicated their feelings that tax rises should only be considered alongside a reduction in States expenditure.
Mr Newman said that any changes that are made to address the monetary deficit should be fair and equitable.
‘There should be a desire to remove unnecessary costs, not simply increase taxes, which will only place more strain on what we all know is a reducing working population.
‘Longer term, we firmly believe ways should be considered for increasing the local workforce while controlling the acceptable increase in population.
‘Some of our members are unable to expand their businesses as there is either insufficient labour on-island to recruit, or it is onerous and expensive to bring staff in from overseas.’
Jersey – 13 years of GST, Chamber and Guernsey Party reaction Page 5
