The only political party in the island said its proposals aim to make the reforms fairer for lower- and middle-income households while using changes to the tax system to encourage younger people to remain in or move to Guernsey.
Under the amendment, GST could increase to 4% after two years and 5% after four years, but the increases would be subject to a number of conditions, such as retaining measures to offset impact on lower- and middle-income households, including increased social security allowances, changes to the income tax threshold, pensions and benefits.
The amendment proposes legal provision which would require the support of two-thirds of States members to separate future GST rates from measures to make the system more progressive.
Party leader Gavin St Pier, pictured, said Future Guernsey recognised that tax reform was about more than just GST.
‘Tax reform is not just about building a tax system that is capable of delivering the services the whole community needs, but also an opportunity to build our future economic capacity by making the island more attractive and viable for younger people,’ he said.
‘That’s what an Additional Earnings Allowance would do. That’s why we want to direct P&R to look at a number of tax reform options ahead of the 2028 Budget.’
P&R would also be asked to consider measures to support home ownership, a long-term review of the role social security contributions play in raising States revenue, and financial support for families with the costs of raising children.
Forward Guernsey member Tom Rylatt said the party wanted to ensure reform created a fairer system for lower- and middle-income families. He said they had been particularly affected by the cost of living.
‘Having a 15% basic rate of income tax, combined with a social security contributions allowance, makes a big difference,’ he said.
‘Our amendment would ensure that the progressive reforms are well protected in law and do not get whittled away by inflation over time.’
Deputy Sally Rochester said the party had consulted widely and listened to concerns over P&R’s proposals and Deputy Rhona Humphreys said the amendment consolidated a number of amendments it had previously lodged to assist in shortening debate.
‘We believe that it is essential for the island that decisions are made next week and we will do what we can to ensure this outcome,’ she said.
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