Proposals to increase Guernsey income tax return

Two proposals to avoid the introduction of a goods and services (GST) tax in Guernsey, by increasing the rate of income tax instead, have been put forward.

Four deputies want to increase the rate to 22%, instead of Policy and Resources' (P&R) tax reform package, with one of the schemes time-limited for two years.

P&R's package includes a 3% GST, reduced income tax rates, higher income tax allowances, limits for social security contributions, the reintroduction of motor tax and higher taxes for some businesses.

The scheme to increase income tax rates comes alongside about 30 new proposals, which could be debated next week as part of discussions on the future of Guernsey's tax system.

Guernsey's States agreed that reforming the island's tax system should be one of the government's five "super-priorities" for this political term.

In 2024, deputies agreed to introduce a 5% GST, alongside mitigations similar to P&R's package, to protect lower earners.

If deputies do not finish debating plans for tax reform by the end of this coming meeting, the business will spill into the meeting starting on 21 October.

Officials have warned if a decision on the introduction of GST is delayed later this year, plans to implement it in 2028 could be put in jeopardy.

Deputy David Goy said his eight proposals would allow deputies to avoid the introduction of a GST, through methods like the taxation of underused buildings.

Guernsey's only registered political party Forward Guernsey has suggested a pathway to 5% GST alongside plans to explore new tax breaks for young workers, first-time buyers and families.

The two proposals to increase income tax are slightly different in how they do it.

Deputies Adrian Gabriel and Garry Collins only want to increase the rate for the next two years, while deputies John Gollop and Aidan Matthews' plans do not have a time limit.

Former Chief Minister Lyndon Trott attempted to increase the rate of income tax at the 2025 budget and failed.

More than 50 amendments to P&R's tax plans have been proposed.

Moves to take GST off the table and have a referendum on introducing the tax have already been defeated at the last States meeting.

However, amendments that would stop people in Alderney from paying GST on their utility bills and stop the payment of GST on food are yet to be considered after not being debated at the last States sitting.

A number of others have carried over from the last meeting, including Deputy Gavin St Pier's proposals to tax Guernsey's governor.

New amendments, which have been lodged since the last meeting concluded in June, include:

• Deputy Andy Sloan's proposals to remove the mitigations from P&R's package
• Deputy Adrian Gabriel's move to separate the debate on GST from proposed taxes on motoring
• Deputy Rob Curgenven's scheme to give tax breaks to people building their own homes
• Deputy John Gollop's proposals to change the way property is taxed locally
• Curgenven's plans for a change to social security contribution allowances
• Deputy Marc Leadbeater's plans for a one year pause before a decision on GST

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