The revelation came during a public presentation from Policy & Resources’s corporate tax sub-committee.
In responding to a question from the floor, Deputy Charles Parkinson announced the figure of between £105 and £106m., which included an estimate of £39m. worth of accruals from the new 15% Pillar II global minimum tax on the profits of large companies. It should be revealed early in June.
But it was stressed by the sub-committee that this was only an estimate and it could end up being either higher or lower.
But tax expert Mike Williams sounded a warning that were it not for this Pillar II income, the island’s structural deficit would be more than £100m. instead of the estimated £77m.
Gavin St Pier, who hosted the meeting, stressed that much of the revenue-raising work was required to invest in the island’s infrastructure.
He said it was this need which led to the conclusion that Guernsey had a large structural deficit, despite having revenue surpluses.
He maintained there was a need to invest a minimum of 2% of Guernsey’s GDP in capital spending.
The public meeting, which only attracted about 50 people, was moderated by Pascal Saint-Amans, the former head of tax at the OECD.
He set the scene by saying that Guernsey had the lowest tax-to-GDP ratio of any developed country at 21% which was lower than either Jersey or the Isle of Man, and compared to 47% in France.
Deputy St Pier, who appeared as P&R treasury lead just two days before he was set to vacate the seat, pointed to the fragility of Guernsey’s tax system where 75% of public revenues come from personal income tax and social security contributions from the working age population. He said this was a particular worry given the island’s ageing demographic.
Many people in attendance posed questions about the potential GST-plus package, but were told that the panel’s focus had been on corporate tax reform and then comparing those opportunities with GST-plus in relation to raising revenue.
The sub-committee had recommended pressing on with GST-plus because it had clearly identified that no realistic changes to corporate taxes could raise enough to meet the estimated black hole in public finances.
The full P&R committee is still to confirm if it will be proposing GST-plus to the States. It is due to publish its final report in three weeks’ time, for a States debate in July.