The committee now expects the package to generate about £36m. a year in net additional revenue for the States, down from £39m. published with its proposals three months ago.
The revision was promised in written answers to a series of questions from Deputy Rob Curgenven, and follows the incorporation of data from the latest Household Expenditure Survey, which showed a real-terms fall in local households' spending on goods and services.
The principal reason for the reduced forecast is that lower household spending would result in less being raised through the proposed 3% GST.
Annual revenue from GST on household spending is now put at £38.3m., against £41m. previously, while GST from visitors falls to £3.5m. from £4.7m.
Other elements have shifted less. Income tax changes are now predicted to cost the exchequer £26.2m., compared with £27.9m. previously, and Social Security contributions changes are expected to raise £1.2m. rather than £1.6m. Forecasts for most of the remaining measures are unchanged.
‘The world does not stand still while we deliberate,’ said P&R president Lindsay de Sausmarez.
‘We thought it was important that the financial estimates supporting the tax reform package were updated when better and more recent evidence became available.’
Officials recalculated the figures using the latest household and visitor expenditure surveys as well as the most recent income tax and social security forecasts, none of which were available when the package was first proposed.
‘The reduction does not alter the fundamental purpose or balance of the package, as it still provides substantial tax relief for people on average and lower incomes while securing the additional funding necessary for essential services and reducing our over-dependency on income-based taxation,' said Deputy de Sausmarez.
The committee reiterated that GST was only one element of a its wide-ranging reforms, including tax breaks which should leave most islanders with more disposable income than they have now, even after a consumption tax is introduced.
Deputy de Sausmarez said that a broader tax base was essential to avoid exhausting States reserves.
An independent check on the committee’s modelling, carried out by a local firm, is expected to be presented to States members today.
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