Jersey Report Considers Tax Changes
by Jason Gorringe, Lowtax.net, London
01 September, 2016
Jersey's Fiscal Policy Panel has weighed a number of taxation measures to support the island's economy in its ninth annual fiscal policy report.
The measures include a reduction in the goods and services tax (GST), income tax changes, and changes to employee social security contributions. In each case the Panel said there was risk of benefits leaking outside the local economy and other associated risks.
On a possible reduction in GST, the Panel observed that the reduction may not be passed on fully to consumers and is not well targeted as it benefits everyone – those on low and high incomes and residents and visitors alike. Further, it may prove politically difficult to increase the rate of GST back to its previous level, putting fiscal consolidation at risk.
The Panel said income tax changes do not benefit those who do not pay tax and are difficult to make timely because of lags in the tax system, while employee social security contributions only impact those who have employment income and could have implications for the Social Security Fund.
Given the economic conditions and general uncertainty facing the island the Panel said it was " vital to ensure that additional flexibility is built into plans over the 2016-19 period".
See all of today's news