The Confederation of Guernsey Industry has urged the States to consider alternatives to a Goods and Services Tax to address the projected deficit in States’ finances.
The industry group believes that government spending reviews, an increase in income tax, rises in company registration costs and corporate taxes along with the introduction of deferred pensions should form part of a broader package of measures.
The Confederation of Guernsey Industry (CGi) maintains that changes in the corporate tax regime, rises in the annual fees for businesses through the Guernsey Registry and reviews of government expenditure should be considered alongside income tax reform. The industry group supports the adoption of deferred pensions to reduce the immediate fiscal pressures on public pensions payouts, which it notes the States has consistently rejected.
Garin Dart (pictured), CGi Chair, said: “We have been unequivocal for many years in opposing GST as it is regressive. It would have a negative impact on the economy, notably on small and medium sized businesses in all sectors and in particular on retail and hospitality by increasing costs and the administrative burden.
“It would also land at a time when the States should be considering measures for stimulating the local economy, as GST will have precisely the opposite effect.
“Our preference has always been for modest increases in income tax, which can be easily administered, adjusted and also removed as required. P&R is in a difficult position and no-one wants to see any rise in their personal costs, but income tax – especially for higher earners – is by far and away the most efficient and equitable way of collecting additional revenues.”
Mr Dart also questioned how much modelling had been performed in respect of any costs that are index-linked, as these would be pushed higher still as a result of higher inflation driven by the States policies.
