A new tax, more 'proportionate' to wealth, to be put to Guernsey's States

Deputy David Goy initially wants public feedback on a new tax system that would look at alternative sources of revenue, rather than GST.

Deputy David Goy says that GST and income tax take more, proportionally, from medium to low income households.

He says at its core, the Productivity Incentivisation Tax (PIT) is a framework 'designed to address structural under-contribution in the tax system' and ensure more 'proportionate contribution'.

The PIT Proposal aims to generate revenue through three streams:

• Under utilised Property Levy: A tax on the vacant or mostly vacant homes in Guernsey
• Fair contribution levy: Taxing households who are technically 'low income', despite large inflows and high wealth.
• Premium asset levy: Applying targeted levies to private premium vehicles, private aircraft, luxury vessels, and high-value property transactions.

He wants to make sure that those with the 'greatest financial means contribute proportionally'.

He says in the Proposal:

GST falls most heavily on middle-income households.

Corporate tax increases risk penalising the productive sectors of our economy.

Personal income tax increases and higher social contributions immediately reduce the disposable income of working households and local entrepreneurs.

Across-the-board spending reductions are often little more than stealth public service cuts.

He told Island FM:

"I see PIT as a fiscal due diligence. 

"Before we ask for more money from ordinary families and businesses, we need to first make sure that we have captured all sources of contribution, and that is the bottom line. 

"The key word is 'proportionate', for someone of that level of financial ability [to own vacant property or luxury assets] it makes sense for them to contribute proportionately to their financial capacity."

Policy and Resources published its tax reform policy letter yesterday (9 June) based on a 3% GST, a broader tax base and a benefits system to cushion the less well off.

Committee president Lindsay de Sausmarez told us she is open to opinion from deputies:

"We’re a debating Chamber so it's really important that members can explore the package, talk about it, and if they’ve got ideas that they want to run past the rest of this Assembly that’s absolutely their right to do, so it’s an important part of our Democratic process.

"But I think there is a broad awareness that this is an issue that’s been kicking around for 20 years and it really does rest with us to be the States responsible for sorting it out."