States campaign seeks to explain need for tax changes

A CAMPAIGN has been launched to try and get the public engaged with proposed changes to the island’s taxes.

States Treasurer Bethan Haines explaining the need for a review of the tax system at a media briefing. She features heavily in a campaign to explain the changes to islanders. (Picture by Sophie Rabey, 29993773)
States Treasurer Bethan Haines explaining the need for a review of the tax system at a media briefing. She features heavily in a campaign to explain the changes to islanders. (Picture by Sophie Rabey, 29993773)

In addition to a planned drop-in at Beau Sejour tomorrow morning, at which deputies can be questioned on the subject, the States Treasurer and other economic analysts have put together a series of articles on the government website, aimed at ensuring the public understand the pros and cons of each of the options defined as solutions for reducing the deficit between what Guernsey spends every year and what it brings in in tax.

Short films featuring States Treasurer Bethan Haines explain the need, identified by the Tax Review Steering Group and backed by Policy & Resources in its report to deputies, to raise up to an extra £75m. a year through changes to income tax, social security contributions and the introduction of a goods and services tax.

This amount is not a target but a limit, set by a previous decision of the States to set a ceiling whereby total taxation cannot exceed 24% of gross domestic product.

P&R has made clear its preference for a GST and this view has been backed by Employment & Social Security.

One of the films is entitled Can a regressive GST be offset?

In it, Ms Haines explains that although any consumption tax of this type forces lower income households to lose a bigger proportion of their money to the treasury, they can end up better off as long as other changes are introduced at the same time – such as increasing income tax relief thresholds and reducing social security contributions for the lower paid.

The States will debate whether to approve further analysis of the three options at its next meeting on Wednesday 29 September.

. The drop-in is at Beau Sejour tomorrow from 10am until noon.

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