Guernsey’s Policy & Resources Committee publishes timeline to get to final States decision on tax

The timeline will see two programmes of work running alongside each other, with the intention that the States will be able to make a final decision before the end of Quarter 2 next year on the tax reform options it wants to implement.

At the beginning of this term the Committee announced plans to create a sub-committee to review alternative options such as corporate tax, which is the first workstream.

The second workstream is to continue the necessary work to enable the timely implementation of the ‘GST-plus’ tax package (GST along with income tax and social security reforms) that the previous States agreed in November 2024, if the States decide in due course to proceed with this package.

As work on these two programmes develops, there are some key milestones:

• The official launch of the Tax Review Sub-committee looking at alternative options such as corporate tax, with its terms of reference published.
• In early 2026 the States will debate whether to include GST on food or not. This debate is needed prior to the final States decision to both ensure the Assembly has all necessary information to make the final decision on tax reform, but also to ensure the timely introduction of the GST-plus package should the States in due course direct its implementation.
• The Tax Review Sub-committee will complete its work in Q1 2026 and present its findings to the Policy & Resources Committee.
• The Policy & Resources Committee will then publish a policy letter with its recommendations to the States.

Deputy Charles Parkinson, Member of the Policy & Resources Committee who will lead the Tax Review Sub-Committee, said: “I have been consistent for some considerable time in my view that corporate tax reform has the potential to play a significant role in addressing our fiscal difficulties. That is, of course, a personal view but one that I expressed throughout the election campaign, so I am pleased my colleagues on P&R have asked me to lead the work of the Tax Review Sub-Committee to review alternative options such as corporate tax.

“While there continues to be healthy discussion and debate around the right solution, what should be beyond discussion at this stage is that there is an urgent need for tax reform to safeguard public finances in the years ahead. This cannot be an issue that continues to be kicked down the road and that is a key test for this new States. We want to make sure the Assembly has all the necessary information to allow them to make an informed final decision before the end of Quarter 2 next year.

“My intention is that the work of the Tax Review Sub-Committee will be as open as possible. That starts today with the publication of the terms of reference for the work we’ll be doing over the next few months, but will extend to regular updates and involve independent and impartial experts. The community must be engaged in this work so that they can be reassured both about the process and that no stone has been left unturned.”

Deputy Gavin St. Pier, Vice-President of the Policy & Resources Committee, who leads on resources and will be a member of the Tax Review Sub-committee, said: “There has been much discussion and multiple States debates over the last decade about how best to solve the challenging state of our public finances. The status quo is unsustainable. The previous States agreed in November 2024 to carry out the necessary preparatory work to implement what has become known as the GST-plus package of tax reforms. This package includes a Goods and Services Tax but also reforms to income tax and social security that would mitigate the impact of a GST, particularly for the less well-off members of our community.

“At the start of this term we committed to reviewing other tax options, but we were also clear that work to prepare for the implementation of GST-plus should continue as planned, to avoid any delay in its introduction if the States ultimately decide it is the better solution to our financial challenges. P&R is in no way pre-judging either our final recommendation to the Assembly, or its decision. Our focus must be on enabling the States to make a fully informed final decision on tax reform but also to enable the implementation of the final package as soon as possible. We are also committed to expenditure restraint and, where possible, reduction too. To do so will require political support from our colleagues in the States when the 2026 Budget is debated in November.”