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The Government is looking to make £120m in savings and introduce new taxes over the next four years as it tries to ‘rebalance’ in the wake of covid unleashing a £395m blow to the public purse.
Revenue is expected to fall by £96m this year alone, followed by £115m in 2021, £99m in 2022 and £85m in 2023.
Among the proposals being considered to plug that gap is a scheme for taxing the profits of medicinal cannabis companies and a potential duty on vape products.
Reviews are also due to be conducted on tax measures arising from research into environmentally friendly products, Stamp Duty as a potential revenue stream, and the de minimis level.
Pictured: Proposals to tax medicinal cannabis companies are being drawn up.
They come after a group of independent economists known as the Fiscal Policy Panel (FPP) concluded that Jersey would experience a weaker recovery from the pandemic than expected, and may find its economy up to 6% smaller in the medium-term.
The FPP also predicted in August that the island would experience a sharper downturn in 2020 than initially forecast, largely due to the impact on banking and finance profits.
On top of the blow struck by covid, they also warned that the island was facing a ‘structural deficit’ – a potential permanent imbalance in finances – that they should aim to close by 2024.
To do this, the Government was warned to veer away from large cuts in spending.
The Government has said it will be responding with a rebranded efficiencies programme worth £120m – the ‘rebalancing plan’.
It has pledged to deliver £40m in 2020, made up of £28m of recurring savings and £12m in “one-off” measures.
Nearly every Ministerial department has been set a savings target to reach a goal of £20m in 2021, with Health facing the biggest of £5m and Infrastructure coming in second with £4.5m.
Pictured: Savings targets for 2021.
Education is the only department not to be taking a hit. Instead, £42m is to be invested in a three-year school reform programme,
More details are expected on this programme later this week, as well as during today’s official unveiling of the Government Plan 2021-2014.
Chief Minister Senator John Le Fondré and Treasury Minister Deputy Susie Pinel will be appearing at a press conference this afternoon.
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