More than £400,000 spent by States on Tax Review
THE States spent around £420,000 reviewing and promoting options to raise more revenue before deputies threw out all five alternative tax plans last month.
Consultancy costs to look at various tax options were around £373,000 and communication and engagement costs over the course of the Tax Review were around £48,000.
Phase one of the review lasted until October 2021, when Policy & Resources Committee its original proposals for GST rather than face certain defeat in the States and pledged to examine other options to raise more income.
Phase two lasted from then until last month, when the States rejected three tax plans from P&R, including another bid for GST, and rival schemes proposed by Deputies Heidi Soulsby and Peter Roffey respectively.
‘Consultancy costs in phase one (£125,000) included a detailed economic assessment of various income and consumption tax options. This piece of work was supported by detailed in-house modelling of potential tax structures,’ said P&R, in a reply to a freedom of information request.
‘Consultancy costs in phase two (£247,911) included a detailed review of the options for corporate tax reform and business analysis to establish the potential operational costs of potential tax reforms.
‘Communication and engagement costs (£48,452) included the hosting of 12 public events and livestreams in Guernsey and Alderney, and the creation and distribution of supporting materials.
‘Phase two communication costs included the full cost of creating the ourfuture.gg website, which also covers the communications for other major policy initiatives.’
When the Tax Review was originally proposed in 2020, it was expected to cost around £150,000.
But costs nearly trebled when the Tax Review was expanded in 2021, in particular after an accountancy firm was engaged to look again at whether more income could be raised from companies.
The Assembly’s rejection of all five alternative tax plans leaves a looming deficit in States finances which is projected to reach nearly £100m. a year.
Deputies did vote last month to set up various further reviews into raising taxes and cut spending, but it is uncertain whether they will result in the States accepting any proposals to reduce the deficit before the end of this current term in June 2025.
