Attempt To Raise Income Tax Rate Fails

A phased approach to raising income tax to 23% by 2025, instead of adopting GST, has failed in the States.

Deputy Lyndon Trott opened his speech by saying a rise in the basic rate of tax would impact on him considerably, as a relatively high earner.

But said it was important to get something from the current debate, given he didn't believe GST would be passed:

"Do I believe that this amendment is the perfect option? Well, the answer to that is a resounding 'no'. Do I believe that this amendment is probably the only chance of leaving here this week with something on the revenue side on the table, yes I do."

But he said it was fairer to islanders than GST. Deputy Peter Ferbrache vehemently disagreed, saying it would impact on the average Guernsey wage earner, those not employed in finance, the most:

"If the lawyers who are earning lots of money here, think that they have got to pay an extra 15 or 18 thousand pounds in tax and they want to leave, then I will shake their hand thank them very much, and say don't worry there is another 50 people that will come and take your job.

I do have sympathy with the electrician or the nurse or the teacher that's going to have to suddenly pay an extra 3% in income tax."

The amendment absolutely divided opinion, with deputy Dave Mahoney, for P&R, opposed to increasing income tax:

"It's barely credible that one of our most experienced deputies would lead this charge to the cliff edge.

Pied-Piper-esque, marching others off a cliff."

The final e-vote saw the amendment to P&R's Funding and Investment Plan convincingly voted out by 30 votes to 10.

Earlier, deputy Charles Parkinson fielded his amendment calling for a territorial income tax. His speech was very similar to the one he made on the same amendment in February and P&R attacked that. He retorted that it wasn't his fault:

"There is no point complaining to me that I am making speeches on a similar subject to speeches I have made in previous debates, if Policy and Resources keep bringing the same propositions back to the assembly - again and again." 

His amendment lost heavily, 29 votes to 11, the same margin as in February.

Debate continues on amendments to the F&IP.