A Deputy has told the States to get its “house in order” before committing to GST.
Deputy Marc Leadbeater is preparing an amendment that would block any final decision on GST until the States has a clearer picture of Guernsey’s finances.
The Home Affairs President said the message from businesses and the public had been clear: “Get your house in order before you introduce a GST.”
The proposed amendment would not rule out GST altogether, but would require the States to gather more information before deciding whether the tax is needed.
Deputy Leadbeater wants politicians to have greater certainty about factors including future Pillar Two revenues, progress on efficiency savings and the Revenue Service’s readiness to administer any new tax measures.
Deputy Leadbeater’s statement echoed recent calls from politicians and business groups, for the States to control spending and reduce waste before looking at raising taxes.
Under his proposal, GST and several related tax reforms would be redesignated as “Reserved Measures”, allowing preparatory work to continue while delaying a final decision on whether they should be introduced.
Deputy Leadbeater said States Members currently lacked some of the information needed to make a fully informed decision.
He wants the government to first provide greater clarity on a range of issues, including the value of future Pillar Two tax receipts, progress on delivering spending reductions and efficiencies, and the overall financial performance of the Bailiwick.
He is also calling for updated projections covering demographics, workforce pressures and demand for public services, together with evidence that operational and staffing issues within the Revenue Service are being addressed.
Deputy Leadbeater said his amendment would allow the States to back tax reform in principle while postponing any final commitment until those uncertainties have been resolved.
“This amendment does not reject the need for responsible fiscal planning, nor does it seek to discard the considerable body of work undertaken by the Policy & Resources Committee and the Tax Review Sub-Committee,” he said.
“Its purpose is to change the sequence in which the States takes the principal decision on the introduction of a Goods and Services Tax and the other measures intrinsically linked to it.”
The current Tax Reform policy letter would see GST introduced alongside wider changes to Guernsey’s tax and social security systems in 2028, if approved by the States when the debate resumes in September.
Deputy Leadbeater said his amendment would allow reform work to continue while ensuring that any final commitment to GST is made only after the key assumptions underpinning the proposals have been tested against updated evidence.
Further details of the amendment are expected to be released ahead of the September debate.
