Politicians accused of wasting a year reviewing tax

Guernsey's top political committee has been accused of "wasting a year" reviewing the island's corporate tax arrangements.

Scrutiny Management Committee president Andy Sloan said the States would have been better off freezing budgets as he had suggested last year.

Earlier this week, Policy and Resources (P&R) ruled out corporate tax reform as a "silver bullet" to plug the shortfall in States finances, estimated at £77m by treasury officials.

P&R president Lindsay de Sausmarez said: "We promised to explore all other options just to leave no stone unturned to make sure the States could make a really well‑informed decision.

"We've been busy looking at a far broader range of options. There's a much bigger scope of work that P&R has been doing."

Final proposals ahead of a debate on tax reform in July will be published in early June.

Sloan said: "It's all a whole lot of nothing, I'm afraid, we've wasted another year on reviews getting nowhere.

"The cynic in me suspects this whole process was a sham to let the two thirds of deputies who got elected on an anti GST ticket pretend they'd done something to stop it."

The report looking at options for corporate tax stated changes to the island's tax regime could bring in around £3m a year.

Following the publication of the tax-review committee's proposals, its chair Charles Parkinson said: "In the long run Guernsey will need a GST to support the level of capital investment which it will require. I'm resigned to it in the medium term."

At the 2024 general election Parkinson said he wanted to reform the island's corporate tax system to ensure companies in Guernsey paid their fair share. He also said he was opposed to a GST.

Parkinson finished third at June's general election with 9,294 votes.

Former Deputy Chief Minister Mark Helyar warned: "The continued political dithering and empty promises that someone else could pay will cost Guernsey dearly in the next few years."

He said he had grown sceptical about parts of the tax package, colloquially known as GST plus, recently.

The package was agreed by the States in 2024 and will be introduced in 2028 provided the States does not stop it during the debate on tax reform in July this year.

Officials say GST plus will bring in around £50m a year, through the imposition of a 5% goods and services tax (GST), a lower rate of income tax for earnings under £32,400, reforms to social security contributions and higher income tax allowances.

Helyar said: "Some of the proposals around social security need an impact assessment as they appear to be a potential act of self-harm. I doubt we can afford the plus of GST plus at all."

He was part of a P&R committee which proposed a similar package to GST plus in the previous political term. He also supported its introduction when the package was approved in 2024.

But since then he has said there was a "pressing need for major civil service and government reform".

"I am now unwilling to subject the public to GST purely to feed a government system which is, to all intents, broken.

"There is no evidence of accountability, reform or performance management in the civil service so tax rises will simply go towards more feeding of a machine over which we cannot exercise any control."

Backbencher David Goy said he did not agree with the results of the tax-review committee's analysis and had put forward his own plans for tax reform to P&R.

In a post on social media he stated: "We do have a viable alternative to GST plus, one that doesn't penalise ordinary islanders or the productive corporations that keep our economy moving.

"This isn't about hiking corporate tax or raising personal income tax for hard-working people. That would simply punish the very people who are already carrying the weight of this island on their shoulders."

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