States approve “long overdue” tax reforms

Tuesday 04 February 2020

Politicians have voted overwhelmingly in favour of the Treasury Minister’s plans to give married couples and civil partners equal rights and responsibilities over their tax affairs.

The States Assembly has today approved the first of Deputy Susie Pinel’s planned reforms to the personal tax system, which she described as a “stepping stone” to introducing fully independent taxation where every islander is taxed the same regardless of marital status.

Despite eleventh-hour criticism of her vision for Jersey taxation from businesses and politicians, the Minister has managed to get her first reform over the line with 40 votes in favour, two against (Deputies Trevor Pointon and Steve Ahier) and two abstaining from the vote (Senator Kristina Moore and Constable Karen Shenton-Stone). 

Although the Assembly has passed the plans to allow both partners in a marriage and a civil partnership equal say over and liability for their tax affairs, the Treasury is yet to finalise the legislation that will bring this change about.

The Minister has, however, promised that this will be brought to States Members before the end of this year.

The proposal is intended to pave the way for an entirely independent tax system designed to tax everyone in the same way whether they’re married, in a civil partnership or single.

During her opening speech, Deputy Pinel said that “reform is long overdue” and this was a “modest but significant” change to promote tax equality within couples.

Addressing the Assembly, the Minister said: “There will be no changes to the financial situations of the couples in this legislation. Do any of us, as States Members, really want to have to explain to Jersey’s women and male spouses ‘B’ and civil partners ‘B’ that we have consciously decided to leave them in limbo for a further two tax years? I, for one, do not.”

Several Members spoke during the debate including Senator Kristina Moore, Chair of the Corporate Services Scrutiny Panel – which had raised concerns that joint and several liability could end up unfairly hitting low income families and children.

Making her views known to the Assembly, the Senator said: “I do have to say I feel somewhat like I’m Alice trying to look through the looking glass when looking at this proposition… It feels as if we’re trying to solve a problem, but we’re not solving it at all." 

Saying that the Scrutiny Panel’s opposition to the proposals was done “with some reluctance as we all agree with that core aim of moving towards independent taxation”.

Having said this, the senior scrutineer also addressed the Minister’s claim that there has been some confusion between this initial reform to the way spouses and civil partners are taxed and the wider intention to move toward independent taxation further down the line. 

“If we’re confused, perhaps the Minister should consider that some responsibility falls at her own feet for not explaining the argument clearly enough.”

Deputy Pinel’s Council of Ministers colleague Senator Sam Mézec got to his feet to congratulate her on “grappling” with this complicated issue and “spurn[ing] her predecessors, all of whom were men, for not coming up with what I think is a perfectly reasonable and sensible step forward”.

After the lunchtime adjournment, several others took the opportunity of speaking on the proposition before the voting was opened and the proposition adopted.