IOD urges tax reform decision at States meeting

Business organisations are calling for the States of Guernsey to make a decision on reforms to the island's tax system.

In a letter to deputies seen by the BBC, the Institute of Directors (IOD) has called on politicians to make a decision at the States meeting starting on Wednesday, and back Policy and Resources' tax package proposal.

The Guernsey Retail Group has warned a goods and services tax (GST) will damage local businesses, while the Chamber of Commerce has stressed the need for both tax reform and spending restraint.

A petition against P&R's tax package with more than 9,000 signatures is set to be handed to deputies this morning.

P&R has proposed a 3% GST, a lower rate of income tax, higher income tax allowances, social security contribution allowances, the re-introduction of motor tax and higher taxes on companies, which it said would raise £36m a year.

The tax package from P&R is subject to more than 40 amendments, which will need to be debated before a decision is made.

Moves to increase the rate of income tax to 22%, have a referendum on P&R's tax package, tax underused properties, reduce Guernsey's contribution to overseas aid and exempt food from a future GST make up some of the proposals to change P&R's plans.

In his letter to deputies, IOD chair Glen Tonks, said: "Finish the job and take the final vote in this sitting.

"Any amendment which seeks to defer a decision, reopen settled questions, or push the final vote beyond this sitting is directly contrary to the objectives of fiscal stability, economic growth, and responsible governance.

"Indecision is not a neutral outcome; it is a tangible financial cost borne by the community."

If the debate does not conclude at this week's States meeting it will resume on 21 October.

The Guernsey Retail Group has encouraged the States to focus on economic growth alongside any tax reform.

It said: "Taxation can raise revenue from the economy Guernsey has today. Growth is what will strengthen the economy and tax base Guernsey will depend upon tomorrow."

Guernsey's Confederation of Industry has backed plans from some deputies to increase the rate of income tax to 22%.

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