No major shake ups in Guernsey's 2026 Budget

Smokers and vapers to be hit with big duty increases but the budget is deliberately 'unspectacular' following the recent election.

Guernsey State's 2026 budget - published today (7 October) - includes a £600 increase in personal income tax allowances.

This would see islanders take home £15,200 before paying any tax.

Head of Policy and Resources, deputy Lindsay de Sausmarez, says although this will reduce States revenue by £1.4M - while a £77m structural deficit exists - it will ease pressure on households.

She says several duty increases are above inflation to help redress the deficit:

• Increasing excise duty on all tobacco products by 13.3%, which would raise the tax on an average packet of 20 cigarettes to £9.71.
• Introducing a new tax on vaping liquid in 2026 of £2.20 per 10ml.
• Increasing motor fuel duty by 1% above inflation (4.3%) from 1 January 2026, bringing the rate to 90.5p per litre.

 A new vape tax is being proposed, putting £2.20 on 10ml of liquid.

Deputy de Sausmarez says it's a 'tough year in fiscal terms'.

“The 2026 Budget illustrates the very challenging financial position that we are once again in. 

“We have known for some time that the combination of the switch to Zero-10 and our changing demographics – the reducing proportion of working age people to retirees, and the increasing health and care needs of our population as we are on average living longer – have profound implications for fiscal balance.

"Our tax base needs to adapt to the new reality, and work is well underway, leaving no stone un-turned to enable the States to agree a definitive way forward next year. 

“Right now, though, we need to make difficult decisions to make ends meet for 2026.

"To balance the books, we’re proposing some modest increases in some taxes and duties combined with some savings through reductions in expenditure.

"Committees have not been given all that they have asked for, but we hope our colleagues appreciate the need for fiscal restraint in the current circumstances.”

The budget go before the Assembly in early November for debate.

The GST-plus package - which is seen as the best way to boost government takings - is scheduled for debate in 2026.