The business group said income tax should be central to tackling the structural deficit, alongside spending cuts and measures to grow the economy. It said this has been its view for more than a decade.
‘We urge deputies to make this change now on a temporary basis, while a sustainable long-term policy is decided – and to discard the proposed goods and services tax, which will harm our economy,’ said CGi chairman Garin Dart.
Mr Dart said the island’s finances would be healthier today if the States had raised income tax temporarily when it debated the 2025 Budget in November 2024.
He said Deputy Parkinson had told the CGi in May that each 1% rise in income tax would raise £5m. a year. A 3% rise three years ago would have brought in an extra £45m. by 2026.
The CGi also doubts that the Revenue Service, which is dealing with significant backlogs made worse by the move to individual taxation, could run an entirely new tax.
‘Introducing GST before the tax backlog is cleared will add to the workload of the Revenue Service staff and the stress on its systems,’ said Mr Dart.
He said the systems for collecting income tax already exist, so rates could be changed quickly.
The group pointed to last week’s updated GST modelling, which cut the estimated yield of a 3% GST from £39m. to £36m. It warned the figure could fall further once 2025/26 data is included, and said Policy & Resources’ package would not raise enough money.
It also criticised what it called a lack of appetite for savings. It noted reports that four States committees are forecasting overspends this year, and that Health & Social Care wants to spend tens of millions of pounds moving services to Raymond Falla House.
The CGi supports measures to boost the economy and productivity. It would also back higher company registration fees, higher corporate taxation and deferred pensions as part of a wider package.
Mr Dart said the CGi does not share the view put forward by other industry groups earlier this year that all businesses support GST.
The group urged deputies to consider every amendment lodged and not to rush a decision to fit the three days set aside for the debate.
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