Hands offers three-pronged approach to raising revenue
FINANCIER and open market resident Guy Hands, pictured, has continued to contribute to the Tax Review debate, and has come up with a new three-pronged approach for the government to raise revenue.
Last month Mr Hands put forward a suggestion of introducing a 1% annual tax on the value of open market properties.
This initially led Policy & Resources president Peter Ferbrache to say he would be happy to discuss the idea, but subsequently the committee issued a statement saying that it would not be pursuing it.
There was kickback, too, from the Open Market Forum, the Committee for Economic Development, and several people who wrote to the Guernsey Press.
They said Mr Hands was out of touch, and expressed concerns over the impact on the market if such a tax were implemented.
But in a new letter to the Guernsey Press, Mr Hands said he was delighted by the support he had received from some open market residents who wanted to contribute towards fixing the States’ deficit and were prepared to pay more tax.
He said the opposition to his idea showed how hard it was to drive change through a single policy and he had come up with a ‘three-fold solution’.
One part would be raising the tax cap to £500,000, frozen for 10 years, and a 5p increase in tax on a new top band.
‘I believe that this is unlikely to reduce Guernsey’s tax competitiveness, as other countries are facing similar issues and may well have to follow suit in the near future,’ he wrote.
The second element would be increasing property taxes, weighted towards those with higher-value properties who have greater wealth.
The final third he suggests come from an independent review of government expenditure to identify savings.
‘By addressing this issue through a number of strands, it is less likely that those who cannot afford to pay will be swept up in a catch-all solution,’ he said.
He referred to the island’s ageing population and how the island had to balance the needs of the asset-rich but cash-poor older generation with those of the ‘asset-poor’ younger generation.
It was also necessary to find a way to attract and retain younger families and wealth producers, he said.
‘We cannot hit our small businesses with GST when they are just recovering from the effects of Covid.’
