Successful amendment puts 5% GST on the table

A proposal to increase the rate of a goods and services tax (GST) to 5% has been approved in principle by deputies but it will still face another vote at the end of a tax reform debate.

The scheme proposed by Forward Guernsey could see tax breaks for low earners and an investigation into incentives to encourage young people to stay in the island.

States members voted 21 to 16 for the proposal. They also backed other plans to exempt small local producers from GST.

Debate on Policy and Resources' (P&R) reform package for a 3% GST, lower income tax rates, social security contribution allowances, the reintroduction of motor tax, higher taxes on companies and higher income tax allowances continues.

Arguing for the proposals, Forward Guernsey member Rhona Humphreys said: "If we want people to stay and build their lives here, we need to look across the range of options which helps them with the cost of raising children.

"We hope to give our population some hope and some help for their future."

Some deputies said they would vote for Forward Guernsey's amendment, but might not back the propositions at the final vote which could come as early as Friday.

In favour of the amendment was deputies Tina Bury, Andy Cameron, Lindsay De Sausmarez, David Dorrity, Steve Falla, John Gollop, Yvonne Burford, Sarah Hansmann Rouxel, Mark Helyar, Rhona Humphreys, Sasha Kazantseva-Miller, Ross Le Brun, Munazza Malik, Paul Montague, Andrew Niles, George Oswald, Sally Rochester, Tom Rylatt, Gavin St Pier, Jennifer Strachan and Steve Williams.

Deputies Haley Camp, Garry Collins, Rob Curgenven, Adrian Gabriel, David Goy, Neil Inder, Bruno Kay-Mouat, Marc Laine, Marc Leadbeater, Liam McKenna, Charles Parkinson, Andy Sloan, Lee Van Katwyk, Simon Vermeulen, Alderney States member Edward Hill and Alderney representative Alexander Snowdon voted against.

Another attempt to exempt food from GST was rejected by deputies with only 15 supporting the proposal from deputy Aidan Matthews.

However, an amendment from deputies Marc Leadbeater and Andy Cameron to exempt small local producers from GST was approved in principle, with P&R expressing frustration this carve-out to the system would be difficult to administer.

Moves to increase the rate of income tax to 22% were rejected by deputies on Wednesday, while proposals to hold a referendum on P&R's tax package and delay a decision on tax reform until next year was also defeated.

Forward Guernsey has had some success during the tax reform meeting, with proposals to limit the length of speeches to five minutes approved by deputies.

The move to curtail and shorten debates on some proposals was criticised by deputies campaigning against P&R's tax package, with a number of deputies moving successful guillotine motions to stop debate on amendments.

P&R's plans to reform the island's tax system has been subject to 57 amendments.

Treasury Lead for P&R Charles Parkinson said during debate yesterday that the date its tax package may be introduced could be pushed back to 2029 after estimations for the revenue from pillar two coporate taxes were revised up to £79m for this year.

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