Tax Board to look for more money

Tuesday 03 September 2019

Reviewing the island’s long-term tax principles and structure, and identifying extra revenue for public services are the main objectives of the 'Revenue Policy Development Board' according to the terms of reference that have recently been approved by the Deputy Chief Minister, Senator Lyndon Farnham.

The Chief Minister’s new board, which he chairs jointly with the Treasury Minister, met twice earlier this year for so-called ‘technical meetings’ at which it received presentations on two keys areas - the tax and revenue system, and the user-pays principle in funding public services.

Now a Ministerial Decision approving the Board’s terms of reference means that the new policy development board can meet formally under a timetable that starts this summer.

Immediate priorities have been  identified as:

• the personal tax review being undertaken by the Treasury Minister;
• changes to social security contributions and the level of supplementation grant paid by the Government of Jersey;
• the need to raise the long-term care charge;
• revenue measures to achieve environmental objectives.

Pictured: The board has been tasked with reviewing the island’s long-term tax principles and structure.

The terms of reference acknowledge that although plans are in place to address the apparent £30-40m annual gap in States finances -  which the Chief Minister has declined to reveal details of, despite growing pressure for more transparency - additional investment in government priorities and modernisation of public services may require new revenue generation.

Against this background the Revenue Policy Development Board has been asked to consider tax changes and other means of increasing such income. However, the terms of reference also note that “taxation, contributions and charges’ strategies provide an opportunity to act upon the Common Strategic Policy priority of reducing of income inequality and the improvement of living standards”. 

The user-pays principle is likely to come in for particular attention with the Board’s scope including current restrictions on increasing user-pays charges.  They will look specifically at issue of full-cost recovery and of competition between government and private sector, and ‘whether charges for these services should be increased to a higher amount.’

Pictured: The board is co-chaired by the Chief Minister and the Treasury Minister and also includes the Minister for Social Security, Deputy Judy Martin; Assistant Environment Minister, Deputy Gregory Guida and St. Mary Deputy, David Johnson.

Noting the challenges associated with reviewing revenue generating initiatives, the terms of reference state: “Any changes relating to revenue raising measures are, by definition, highly politicised and hence the Board will need to provide clear political direction on the measures considered.” 

The Board will also consider the value of commissioning a review looking at how take home pay in Jersey (after housing costs and school fees) has changed over time and how it compares to similar jurisdictions.

Corporate tax and efficiencies and savings are among the few areas expressly excluded by the terms of reference.

Membership of the board, in addition to the two joint chairs, comprises: the Minister for Social Security, Deputy Judy Martin; Assistant Environment Minister, Deputy Gregory Guida and St Mary Deputy, David Johnson.

Pictured: Richard Bell is the group's Senior Officer.

Treasury and Exchequer Director-General, Richard Bell is the group’s Senior Officer while it will receive support from officers from the Treasury’s Tax Policy Unit, Strategic Policy, Performance and Population and the Economics Unit.  

Lay members are to be agreed by the Joint Chair of the Revenue Policy Development Board.