‘P&R narrowed down new tax options too early’

The committee has three options on the table – an income-based health tax at 3% or a goods and services tax of up to 8% with increased personal tax allowance, or a GST of up to 5%, with a smaller increase in the personal income tax allowance.

All three options would see a fairer social security contribution scheme. The aim is to ensure the States finances stay sustainable, as they come under increased pressure.

RSEA represents more than 4,700 people, who are retired public service staff.

President Sean McManus said the association welcomed P&R’s consultation, but some members were concerned that P&R was limiting the choice to increasing income tax or the inevitable introduction of GST.

‘Seeking to overcome a problem associated with a narrow range of taxation formats may not be best addressed by unnecessarily narrowing the range of alternatives under consideration,’ Mr McManus said.

‘That would appear to go against the spirit of the "extensive consultation and engagement" directed by the States.’

RSEA committee member Andy Castle said the association believed that P&R should be able to demonstrate that it has investigated and considered the fullest possible range of options for the nature and level of taxation, including allowances and exemptions, or other income required to sustain 21st century standards for the delivery of public services.

‘This should include even those options which, at first view, may appear unpalatable to some,’ he said.

On behalf of those it represents, the RSEA committee will wish to explore the potential use of thresholds and allowances to mitigate the effects of any new tax and Social Security contributions structure on those households with modest or low incomes.

The association plans to closely monitor any proposals that might emerge from this process, hoping that the effects of any new tax regime become more supportive than regressive.

‘The association’s committee is keen to engage in the tax review consultation exercise as the eventual outcome will be of central concern to the more than 4,700 people that we represent, and to their families,’ Mr McManus said.

‘The roadshows should enable RSEA members attending to ask questions, pose alternatives, note the contributions made by others and to have sufficient time to submit further comments.

'Assuming that P & R really are in listening mode, these events should help broaden the debate and inform deputies.’

n The first P&R tax roadshow drop-in was held at St Peter’s last weekend and gave the public a chance to find out more about the proposals. The next one will be held between 1pm and 3pm at Cobo Community Centre on Saturday 5 March.

n Anyone who is a retired employee of the States of Guernsey and wishes to know more about the RSEA or to have their opinions on the Tax Review represented is welcome to contact the association secretary, Peter Hughes, via rsea@suremail.gg or call 700669 or call the president, Sean McManus on 259654.