‘We may lose this battle, but we won’t lose the GST war’
EVEN if Policy & Resources succeeds in getting support for a goods and services tax at this month’s States meeting, its members will be voted out before they have time to introduce it.
That is the view of former Treasury minister Charles Parkinson, who plans to lay an alternative proposal to introduce a corporation tax at 15%.
‘I am very optimistic,’ he said.
‘We may lose the debate at the end of this month – although I’m still hopeful – but even if a GST is approved, it won’t be possible to get it up and running before 2025 [the date of the next general election]. So even if P&R wins, there will be an effective plebiscite, which will see them voted out.’
Deputy Parkinson and his intended seconder, Deputy Liam McKenna, have organised a public presentation at St Pierre Park at 6pm on Monday 16 January, at which they will explain their alternative proposals.
‘P&R acknowledge we need to review corporate tax, but they tell us we need to introduce a GST first,’ he said.
‘All I’m saying is that we should do that the other way around.
'Let’s reform the corporate tax system and then see how much of a problem remains. The amendment would just change the order of events.’
Deputy Parkinson said the rest of the world was
heading in the direction of establishing corporation tax at 15%, with the OECD leading proposals to introduce that rate for companies with a turnover of more than 750m. euros by next year.
‘Guernsey needs to lead on this issue among the Crown Dependencies,’ he said.
Last year’s debate on the tax review, which included consideration of a GST alongside reforms to income tax and social security contributions, ended with P&R seeking a delay to review options for corporate tax.
The committee has concluded that corporate tax options are fairly limited in how much could be raised while the island remains competitive, and argued that even with such reform, in addition to government savings, the tax base must be significantly broadened in order to compensate for the dwindling percentage of islanders who will be paying income tax in future, as predicted demographic changes materialise.
Debate timing ‘deliberately awkward’
DEPUTY Charles Parkinson has alleged that the timing of the tax review debate has been timed deliberately to make it awkward to oppose effectively.
‘Publishing the proposals in November for debate in January constricts the time available for drafting and consideration of amendments,’ he said.
‘There are scarcely two months and a big chunk has been taken out of the middle, with Christmas and New Year.’
More time would have made it easier for the drafting of amendments and for their submission to P&R for responses.
‘It would have been easier had the debate been in February or March,’ he said. ‘I’m not the only one who’s been affected.’