CGi calls for increases in income tax to fill black hole

FOLLOWING feedback received from its members, the Confederation of Guernsey (CGi) is reiterating its call for the States to consider changes in income tax and social insurance reform, a review of corporation tax and a proper evaluation of some capital projects in order to raise funds to pay for public services.

This follows the decision by the States last week to reject GST along with the other options presented. The CGi would like to see modest rises in the levels of income tax, an increase in the annual fee for businesses, the review of some capital investments and the introduction of a health supplement to generate the necessary funds.

The CGi’s chairman, Dave Newman, said: ‘We are surprised that the States seems to have passed over income tax as a way forward. We accept that P&R is in a difficult position and no-one wants to see any rise in their personal costs, but income tax and social insurance reform – especially for higher earners – are by far and away the most efficient and equitable way for collecting additional revenues.’

‘The mechanism for collecting income and health taxes exists, so changes could easily and quickly be introduced without the huge costs of administration for government and all businesses, our members included, that a GST would have required.’

The CGi committee also maintains that some capital projects should be reviewed for value for money and appropriateness along with an increase in the annual fee for finance businesses as proposed by some IoD members, which would raise considerable sums.

Mr Newman added: ‘Public spending has been a topic raised over the previous two terms and it seems little action, if at all, has been forthcoming. We would support capital expenditure that provides a return as there is an economic justification for borrowing the necessary funds.

‘Projects that incur costs but are considered essential, such as a new dairy, schools and the Alderney Airport redevelopment, should be scrutinised for value. Building a new dairy in the proposed Brickfields location, for example, would create land adjacent to the PEH and allow for key worker accommodation and therefore has merit.’

‘We would be happy to work with the States, alongside other organisations to look at all of these measures and also explore new options as outlined.’

Leave a comment