States set to vote on ‘getting its own house in order’

Marc Leadbeater wants to see more effort on efficiency savings and improvements at the Revenue Service, as well as a clearer picture of the island’s financial position, ahead of a final decision on Policy & Resources’ recommended tax package.

A draft amendment he sent to P&R yesterday, which he hoped to see debated when the States’ tax debate resumes in September, would effectively maintain GST as a future option, but insert a lengthy list of conditions before it could be introduced.

‘The message coming through from business and the public is largely “get your house in order before you introduce a GST”,’ said Deputy Leadbeater.

He said he was making no assumptions about future revenues, but wanted to ensure that any States vote was based on actual receipts, delivered savings and updated forecasts, and demonstrated administrative readiness, rather than rely on forward assumptions.

He said that his amendment would lead to decisions being made in the right sequence and with clearer information.

The amendment would allow some reforms proposed by P&R to proceed, including a new annual tax on motoring and minor extensions of the existing company tax regime.

But GST and other changes linked to it, including reductions in income tax and social security contributions targeted at low- and middle-income households, would inevitably be deferred until after 2028, which is when P&R wants to see them introduced.

P&R’s proposed tax package assumes committees’ budgets will grow by £20m. a year below the rate of inflation by the end of the current States term, but there is no detail on where savings will be made. Deputy Leadbeater said that progress against the savings target should be known before a final vote on whether to introduce GST.

The senior committee has also pledged that delays and backlogs at the Revenue Service will be sorted out by 2028, and deputies recently rejected a sursis which would have made the introduction of GST and income tax changes conditional on those improvements.

P&R confirmed it had received Deputy Leadbeater’s draft amendment and said it would be considered at its next meeting. It is expected that it could be the first of many new attempts to tweak or derail the tax reform package.