Guernsey Press

Time to break the 20% taboo?

ALMOST three years ago now, when the Policy & Resources Committee of the day first came out with a proposal for a goods and services tax, it added another option alongside – a 3% ‘health tax’.


This was immediately seen as a rather disingenuous wheeze. For one, even Policy & Resources didn’t actually fancy it. Sotto voce, it admitted that it was just lumping 3% on income tax.

A couple of years later we get a suggestion of raising a couple of percentage points on income tax, leading to howls of complaint from some deputies, aghast at the idea that Guernsey could be prepared to expose its weakness in the contest for lowest tax jurisdiction among the Crown Dependencies. Although the headline rate of income tax means little when it is undermined by other tax increases all over the place.

This seems not to bother the Isle of Man, which has, seemingly with no concern about what’s going on 550 miles away, announced a 2% ‘health tax’ as part of its 2024/25 Budget.

The tax rise would be applied to earnings above £21,000, and ringfenced for improvements to frontline health services.

If such a move ever found a way back to the table in Guernsey, it may not prove to be the optimum solution.

But it could do three things for this island – provide a balancing alternative to a GST; be part of a review of charging for healthcare and the extent of its future provision; and finally, kill off the fallacy that if we move out of step with the Isle of Man on personal taxation rates, it will be the end of the world as we know it.