Attempt to delay Guernsey GST decision

An attempt to delay a decision on Policy and Resources' (P&R) tax reform proposals will be put forward later.

Deputies Liam McKenna and Mark Helyar have lodged a sursis motivé, or delaying motion, to stop all work on the introduction of a goods and services tax (GST) until 2028, so the island's revenue service can work through its backlog.

McKenna said if the delay was not accepted and P&R's tax proposals were defeated, he would lodge a vote of no confidence in the committee and attempt to force them to resign.

Business leaders have urged politicians not to delay a decision on tax reform and warned "continued indecision" was not good for the island.

P&R has proposed a package of measures including a 3% GST, a lower rate of income tax, motor tax, changes to social security contributions and savings which it said would raise about £40m a year from 2028.

McKenna has also put forward plans to take GST off the table and to put the introduction of a GST to a public referendum.

Just last month, P&R treasury lead Charles Parkinson told the States the revenue service had a backlog of 20,000 returns.

While the States top official Boley Smillie told business leaders dealing with the issues at the revenue service would "reputationally be the single biggest thing that we could do to improve trust and competence in the public service".

McKenna said: "I would suggest P&R should support the sursis [the French word for a suspended sentence] because the treasurer, Deputy Charles Parkinson, has said that the revenue service, if it was a school, would be in special measures.

"So he obviously has concerns, but at the same time he said Guernsey's doing really well.

"So why would we be introducing another tax? I would suggest to P&R that they will support the sursis because if they don't, in the words of Deputy Parkinson, if the P&R committee lose their flagship policy, they should all resign."

Parkinson successfully led a vote of no confidence in P&R during the last political term after its plans for tax reform were defeated.

President of Policy and Resources, Deputy Lindsay De Sausmarez said the suggestion the committee should resign if their policy is not backed was "just politicking".

"If he [McKenna] does that then you know, we live in a democracy, and we'll see what happens but really we're focused on moving the item forward," she said.

"We've been stagnating really, we've been stultified by this issue for so long we haven't been able to invest in infrastructure in the way that we know we need to, and we know that that's such an important basis for economic growth.

"I understand and respect his desire to delay this but we were elected to make decisions and we knew coming into this parliamentary term that some of those decisions would be hard."

De Sausmarez said she had spoken to residents who had made it "very, very clear" that "a lot of people are really struggling with the cost of living in this island".

"We cannot delay because this is actually an opportunity to raise money from corporates, from visitors and from the wealthiest residents in the island to give people on average or lower incomes a really significant tax break to help them cope with the cost of living," she said.

Deputy Gary Collins and Deputy Haley Camp have lodged an amendment calling for the tax proposals to be replaced.

The deputies instead want to see the creation of a States' Investigation & Advisory Committee by September to "ensure every stone is actually turned over before increasing any taxes".

Collins said the committee would assess every government service to determine whether it should continue to be run by the States of Guernsey, be outsourced, be paid for by those who use it or be discontinued.

He said it would also consider new methods of taxation and contributions systems and "investigate all other public sector expenditure for sustainable savings, efficiencies, optimisation and harmonisation".

Collins put himself forward to chair the committee and said "if we have no handle on the States' expenditure, taxing more is the wrong answer to the wrong question".

Camp said the committee would "identify measures that are demonstrably achievable and deliverable, supported by robust quantitative analysis and implementation planning, rather than relying on aspirational savings or efficiencies that cannot be evidenced with confidence".

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