Two proposals to avoid the introduction of a goods and services (GST) tax in Guernsey, by increasing the rate of income tax instead, have been put forward.
Four deputies want to increase the rate to 22%, instead of Policy and Resources’ (P&R) tax reform package, with one of the schemes time-limited for two years.
P&R’s package includes a 3% GST, reduced income tax rates, higher income tax allowances, limits for social security contributions, the reintroduction of motor tax and higher taxes for some businesses.
The scheme to increase income tax rates comes alongside about 30 new proposals, which could be debated next week as part of discussions on the future of Guernsey’s tax system.
Guernsey’s States agreed that reforming the island’s tax system should be one of the government’s five “super-priorities” for this political term.
In 2024, deputies agreed to introduce a 5% GST, alongside mitigations similar to P&R’s package, to protect lower earners.
If deputies do not finish debating plans for tax reform by the end of this coming meeting, the business will spill into the meeting starting on 21 October.
Officials have warned if a decision on the introduction of GST is delayed later this year, plans to implement it in 2028 could be put in jeopardy.
Deputy David Goy said his eight proposals would allow deputies to avoid the introduction of a GST, through methods like the taxation of underused buildings.
Guernsey’s only registered political party Forward Guernsey has suggested a pathway to 5% GST alongside plans to explore new tax breaks for young workers, first-time buyers and families.
