In November, the Guernsey government published a review of its fiscal policy, through which it seeks to increase tax revenues closer to the ceiling of 24% of GDP allowed under the current framework. The current level of revenues stands at around 21% of GDP.
In a statement to the States legislature before a vote on the proposals on 15 January, Guernsey president of policy & resources, Gavin St Pier, reiterated that funding requirements for the island’s public services would require the government to raise more revenues through taxes and charges. However, he noted that Guernsey’s narrow tax base offered little scope for ‘tweaking round the edges’ of the existing system.
The government’s proposals therefore include options for generating additional revenues from:
taxation of company profits;
the existing income tax and social security contribution system;
a health tax; and
the addition of general or limited consumption taxes.
Protecting Guernsey’s status as a low tax jurisdiction remained one the fundamental principles of the island’s fiscal policy, ‘maintaining tax neutrality whilst remaining internationally acceptable in an era when international standards are shifting and shifting fast’, Gavin St Pier said.
In this regard, St Pier confirmed that the terms of reference for the review will ‘preclude the consideration of any form of capital taxes which are considered incompatible with Guernsey's status as a finance centre’.
In November, the Guernsey government published a review of its fiscal policy, through which it seeks to increase tax revenues closer to the ceiling of 24% of GDP allowed under the current framework. The current level of revenues stands at around 21% of GDP.
In a statement to the States legislature before a vote on the proposals on 15 January, Guernsey president of policy & resources, Gavin St Pier, reiterated that funding requirements for the island’s public services would require the government to raise more revenues through taxes and charges. However, he noted that Guernsey’s narrow tax base offered little scope for ‘tweaking round the edges’ of the existing system.
The government’s proposals therefore include options for generating additional revenues from:
taxation of company profits;
the existing income tax and social security contribution system;
a health tax; and
the addition of general or limited consumption taxes.
Protecting Guernsey’s status as a low tax jurisdiction remained one the fundamental principles of the island’s fiscal policy, ‘maintaining tax neutrality whilst remaining internationally acceptable in an era when international standards are shifting and shifting fast’, Gavin St Pier said.
In this regard, St Pier confirmed that the terms of reference for the review will ‘preclude the consideration of any form of capital taxes which are considered incompatible with Guernsey's status as a finance centre’.
