The Policy & Finance Committee wants to move to a situation where every resident is expected to pay taxes based on their personal assets.
At the moment this can be avoided by paying a higher rate of property tax. The committee claims that this measure, known as the ‘forfait’, means people’s taxes don’t relate to their ability to pay.
They want to move away from the forfait system to one where everybody pays taxes based on their asset base. But that won’t mean that everybody has to declare their assets.
Those seeking to keep their affairs confidential will be able to elect to pay Sark’s maximum tax level, currently about £13,000.
For the first time, those who do self-declare their assets, in order to pay a lower level of tax, face the prospect of having their returns audited. Traditionally Sark has relied on a honesty system with no governmental check on tax returns, but in future it is proposed to audit a small selection to double check.
Committee vice-chair Conseiller Natalie Tighe said they have been guided in their review by the results of a public consultation which saw about 50% of islanders giving their views to Chief Pleas.
She said that the changes are needed to fund major capital works such as stabilising La Coupee, harbour rockfall repairs, and sewage and rubbish disposal systems, as well as the maintenance of roads and cliff paths.
On top of that, P&F says it needs to invest in existing services such as health and education.
The earliest the major reforms could be introduced would be 2028, but the committee members are planning smaller ‘targeted measures’ in 2027. That would mean Chief Pleas having to agree to them at their ‘michaelmass’ meeting in the autumn. Those proposed interim changes look likely to face some opposition, with Conseiller Sam Keyte saying they are more far-reaching than P&F suggests, and could add 50% to the tax burden of some islanders.
Sark has never had any form of income tax and none is being proposed.
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