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‘Fair Tax Group’ emerges as election campaign begins

A group of candidates campaigning under a ‘fair tax’ banner hope to put company tax reform at the centre of the general election campaign which officially starts today.

The ‘Fair Tax Group’ has been put together by former treasury minister Charles Parkinson.
The ‘Fair Tax Group’ has been put together by former treasury minister Charles Parkinson. / Guernsey Press

They are united in believing that the States’ financial problems can be overcome by increasing income from the corporate sector rather than imposing new taxes, such as a goods and services tax, or raising existing taxes on households.

The ‘Fair Tax Group’, put together by former treasury minister Charles Parkinson, is not a political party and its members will register as independent candidates with different policies on all other issues.

‘We are a single-issue campaign group,’ said Deputy Parkinson.

‘Our shared concern is to ensure that Guernsey reforms its corporate tax system before imposing any new taxes on the resident population. On other policy matters, our views could vary widely.

‘The public does not like political parties in the Guernsey context and we are all standing as independents. Consequently, most of the members of the group would prefer not to be named as such at this time. They will express their views on fiscal policy in their manifestos.’

The Guernsey Press understands that the group includes a combination of first-time candidates and existing deputies of almost every political stripe in the current Assembly.

They are among an estimated 100 or so candidates who will submit a nomination form to the Bailiff’s Office between 9am today and the deadline of 4.30pm on Wednesday to kick off a five-week election campaign which concludes with three polling days on 15, 17 and 18 June.

Housing and education are certain to feature as major talking points on the campaign trail, as is the culture of local politics after a States term marred by tribalism and personal rivalry. But the biggest election issue may well be tax and spending, with the next Assembly facing a budget shortfall projected to reach nearly £100m. a year by 2040 and a list of capital projects with an estimated cost of £1bn. but only £150m. available to fund them.

The States agreed in November that a tax package known as ‘GST-plus’ should be introduced from 2027. It includes a 5% consumption tax on all purchases, or 6% if food is excluded, together with reductions in income tax and social security contributions which treasury figures indicate would leave most households better off financially than they are now.

But Deputy Parkinson believes that international corporate tax changes known as Pillar II, which are being phased in from this year, could raise enough income to avoid GST-plus, even before wider reforms which he also wants to see to the island’s zero-10 company tax regime.

‘The proceeds of Pillar II taxation may in fact be sufficient to eliminate Guernsey’s anticipated deficit,’ he said.

‘As time has gone by, more and more companies that are within the scope of Pillar II have emerged, a recent example being some of the gaming companies regulated by the Alderney Gambling Commission.’

Earlier this term, the States estimated that Pillar II would bring in additional tax of about £10m. a year. Deputy Parkinson consistently argued that the figure would be tens of millions of pounds higher. Late in 2023, the States revised its estimate and calculated that Pillar II would boost public finances by at least £30m. a year.

‘I believe this is still a significant under-estimate,’ he said.

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