GST will put an even more disproportionate burden on lower paid
I AM dismayed by P&R’s desire to ‘bring Guernsey more into line with international norms’, when it comes to taxation, by introducing a goods and services tax (GST). I understand that there is a major black hole to fill but we are already seeing people at the lower paid end of the market leaving the island because they cannot afford to live here, and employers having great difficulty in recruiting from outside of the island for the same reason. GST will put an even more disproportionate burden on our lower paid and, while tax relief may help with disposable income, it won’t help with people’s expenditure.
It will also make it even harder for local retail to compete with online purchases from outside of the island by pushing up administration costs both for businesses and the States, meaning more revenue will be lost to the island’s coffers.
Set against this, P&R’s half-hearted mention of perhaps ‘taking a look’ at corporation tax does not inspire one with its zeal in exploring other ways of increasing the tax take. Charles Parkinson is quite right when he points out that it is time to revise zero-10 and share the tax burden more equally. It cannot be right that companies are paying zero tax when the average islander is paying 20%.
In addition, it is time that Guernsey woke up and (much as I hate to say it) learnt from our sister island with regard to taxation of high net worth individuals (HNWI). In Jersey HNWIs pay 20% tax on worldwide income up to a maximum of £850k and 1% thereafter. In Guernsey, income tax liability is capped at £200k or £260k of worldwide income (depending on whether you spend 91 days in another jurisdiction per year). Jersey does not have a problem attracting HNWIs with their regime and it means they make a fairer contribution to the island’s income (c.£11m. in 2016). It is high time Guernsey followed suit.
Most Guernsey folk have no desire to ‘fall into line with international norms’ in tax or many other things. What they do want is a system that sees individuals and companies alike pay their fair share. In that respect the island has a long way to go, and GST is certainly not the way to achieve it.
I understand that tinkering won’t solve the current deficit but more creative thought is required to explore alternative solutions.
Mike Tidd
La Retraite
Ruette Rabey
St Martin’s
