The proposal, to be considered at the Michaelmas meeting at the end of September, follows a public consultation on tax reform held earlier this year.
The existence of the consultation, and many of the responses, highlighted the need to ensure that Sark’s tax system is able now and in the future to fund essential public services, infrastructure and the rebuilding of the island’s reserves.
At present, Box 2 allows someone living in the same household as a person paying the ‘forfait’ tax charge to elect to pay only the minimum personal capital tax.
There is currently no limit on how many people in a household can make that election, meaning several members of the same household may pay only the minimum, regardless of their wider financial circumstances.
Under the proposal, Box 2 would be retained but limited to a single member of a qualifying household, with households free to decide which individual makes the election.
The proposed change, which would apply from the 2027 tax year, has been described as ‘targeted and proportionate’, and assurances have been issued that it is not a move to abolish the relief.
Where people who could afford to contribute more paid only the minimum rate, the committee said, a greater share of the cost of public services fell on other taxpayers.
Conseiller Natalie Tighe, deputy chairwoman of the Policy & Finance Committee, said Box 2 had been introduced as a household relief but was being misused.
‘While there may be a case for retaining that relief, it is not reasonable for an unlimited number of people within the same household to benefit from that arrangement, irrespective of their ability to contribute,' she said.
A wider reform programme remains in progress.
‘The restriction introduces a sensible limit that better reflects the principles of fairness, sustainability and shared contribution that should underpin Sark’s tax system,' said Conseiller Tighe.
‘Chief Pleas has been clear that Sark needs a taxation system capable of supporting the island’s future.
'Public services, infrastructure and financial resilience all depend upon a stable and sustainable revenue base.
‘The recent public consultation on potential changes to Sark’s tax regime has been valuable and constructive and this broader programme of reform remains in progress.’
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