Guernsey Concerned About Tax Shortfall
by Jason Gorringe, Lowtax.net, London
04 July, 2016
In recent a statement to Guernsey's legislature the island's Chief Minister, Gavin St Pier, said the island's tax base was unsustainable.
Guernsey's 2015 Accounts show a structural deficit, owing to falling tax revenues and rising health and social services expenditure.
St Pier said: "Income tax receipts from individuals fell by 0.4 percent in real terms in 2015, even after freezing personal allowances. This appears to have arisen as a result of a decrease in the number of those economically active in our economy - and in turn highlights the vulnerability of relying on this narrow tax base as the population ages."
St Pier continued: "Yet more worrying, is the 20 percent real terms' reduction in income tax receipts from companies, despite collecting an additional GBP3m (USD4m) as a result of the extension of the 10 percent income tax rate to fund administrators. The 2015 receipts from banks suffered from the effect of downward adjustments to payments on account in respect of that year, but also through material repayments in respect of previous years. The analysis undertaken by our income tax team suggests that the impact of this downward readjustment will continue in 2016 and beyond."
St Pier said Guernsey needs to broaden and diversify the tax base.
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