Gibraltarians Told Not To Expect Tax Cuts In Budget

by Amanda Banks, Tax-News.com, London

22 June 2004

Gibraltar’s Chief Minister Peter Caruana has told taxpayers not to expect any further tax cuts in the forthcoming Budget Session as the government seeks to concentrate on improvements to public services.

Speaking to the Gibraltar Society of Chartered and Certified Accountancy Bodies, Mr Caruana explained that the ‘first phase’ of tax reductions is now complete, and that before the second phase is commenced the government must first rebalance its finances, adding that it is not sustainable to lower tax whilst raising expenditure.

The Chief Minister also warned that the authorities are planning to undertake a “stringent” campaign to collect back taxes and ensure taxes are paid.

Individuals pay relatively high taxes on their income in Gibraltar unless they are able to take advantage of High Net Worth Individual status or gain exemption as an expatriate executive. However there is no capital gains tax, wealth tax, or sales taxes.

In recent changes made by the government, the maximum tax payable by Category 2 and HNWI will increase from £10,000 per year to £14,000 per year. Also, the maximum level of assessable income attributable to Category 2 individuals under the 1999 rules and HNWI under the 1992 rules is to be raised from £45,000 to £50,000. The changes commence at the start of the new tax year on July 1 2004.

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