CGi calls for alternatives to GST to tackle financial deficit
- The Confederation of Guernsey Industry advocates for alternatives to the proposed Goods and Services Tax.
- The group suggests government spending reviews, higher income tax, increased company registration costs, corporate taxes, and deferred pensions.
- CGi Chair Garin Dart criticises GST, claiming it would adversely affect small and medium businesses and the local economy.
- The group prefers modest income tax increases for efficiency and equity in revenue collection.
- CGi calls for government reviews of expenditure alongside potential tax reforms.
The Confederation of Guernsey Industry has called on the States to consider a range of measures to address the anticipated financial shortfall, opposing the introduction of a Goods and Services Tax.
According to CGi, alternatives must be explored to avoid potential negative impacts on the economy, particularly on small and medium-sized enterprises across various sectors, especially retail and hospitality.
CGi argues that a GST would increase costs and administrative burdens on businesses, which is counterproductive at a time when the government should stimulate economic growth.
Garin Dart, CGi Chair, stated, “We have been unequivocal for many years in opposing GST as it is regressive. It would have a negative impact on the economy, notably on small and medium sized businesses in all sectors and in particular on retail and hospitality by increasing costs and the administrative burden.”
CGi's preferred approach involves modest increases in income tax, which it argues can be administered easily and adjusted as needed.
Dart added, “P&R is in a difficult position and no-one wants to see any rise in their personal costs, but income tax – especially for higher earners – is by far and away the most efficient and equitable way of collecting additional revenues.”
Nick Mann
Furthermore, CGi recommends that the States review corporate tax structures, raise annual fees for businesses through the Guernsey Registry, and consider deferred pensions to alleviate immediate pressures on pension payouts. These measures, according to the group, could create a more resilient financial environment without resorting to GST.
Concerns were also raised over the level of modelling performed on costs that are index-linked, particularly as high inflation could further exacerbate these costs under the current States policies.
Dart emphasised the need for careful consideration of these factors as the States navigates its financial challenges.
Nick Mann
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