The idea comes from Deputies Andy Sloan and Munazza Malik, who have lodged an amendment to next week’s tax debate seeking to direct the Policy & Resources Committee to introduce what they call a ‘Child Responsibility Tax Allowance’ for each dependent child in a family.
They want it brought in at the same time as the wider tax reforms are implemented. The two deputies argue that their proposed new allowances would make Guernsey’s income tax system fairer.
‘A fundamental principle of taxation is that taxpayers should contribute according to their ability to pay. Households with dependent children do not have the same disposable income as households without dependents on equivalent earnings,’ said Deputy Sloan.
‘The costs of raising children are substantial, unavoidable and materially reduce a family’s capacity to contribute. A tax system that does not recognise those costs risks imposing a disproportionate burden on working families.’
The idea is that the new allowance would not be means-tested. The deputies add that in an ageing society it was important to minimise the financial barrier for those wanting to have children.
‘The amendment supports the States’ long-term demographic objectives.
‘Guernsey faces the challenge of an ageing population and increasing dependency ratios,’ they said.
‘And while tax policy alone will not determine family decisions, neither should it create unnecessary financial barriers to family life. Families raising today’s children are making a substantial private investment that delivers a wider public benefit.
‘Those children will become tomorrow’s workforce, taxpayers, entrepreneurs, carers and community leaders upon whom the island’s future prosperity depends.’