Gibraltar Lowers Tax Rates In 2014 Budget
by Mike Godfrey, Lowtax.net, Washington
03 July, 2014
Gibraltar has announced a barrage of tax cuts following its highest ever budget surplus of GBP65m (USD111m) and gross domestic product (GDP) growth of ten percent during the financial year 2013/14.
The cuts include a reduction to the standard rate of tax for individuals, from 30 percent to 20 percent, and to the standard rate of tax for trusts, from 30 percent to 10 percent, with effect from July 1, 2014. The income tax rate on income above the tax exempt threshold, raised to GBP10,500 in the Budget, and up to GBP16,000 has been lowered to 18 percent from 24 percent.
For new companies starting a business in Gibraltar, the Government will offer a 65 percent discount on property tax (Rates) for their first year of trading.
There will be no increase in duties on fuel and, to encourage shipping, there is to be a 75 percent reduction in tonnage dues for vessels taking on provisions, spares, stores or crew in Gibraltar at Eastern Anchorage, and bunker fuel at Western Anchorage. In addition, passenger tax at the Gibraltar International Airport is abolished for passengers who are joining vessels in Gibraltar.
Support will be provided to first-time buyers. An income tax deduction of up to GBP6,000 will be allowed against approved expenditure incurred on the purchase of a home during the tax year commencing July 1, 2014.
Gibraltar also announced that it is removing import duty (with a zero rate) on a range of products including mobile phones, LED lighting, artwork, and jet-skis. Import duty will be reduced for jewelry and furniture, and incentives for hybrid vehicles will be extended to vehicles that solely use electric power.
There will be a 20 percent increase in import duty on rolling tobacco (from GBP35 to GBP42 per kilo) and other changes, mainly for environmental reasons, including the introduction of a tax on imported single-use plastic bags, and a doubling of import duty on inefficient white goods.
The new measures have been introduced on the back of a strengthening economy for Gibraltar, with its GDP-per-capita ratio increasing to GBP47,066 (3rd place globally) and debt well under control at 25 percent of GDP.
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