Guernsey Budget Is 'Good News' Says A&F President

by Robert Lee, Tax-News.com, London

28 November 2001

Guernsey's Advisory and Finance president, Deputy Laurie Morgan, has described the Island's budget this week as a 'good news' budget as he announced measures including increases in personal tax allowances, the abolition of stamp duty on property worth up to £150,000 to help first time buyers, and a freeze on taxes on petrol and alcohol.

'This is felt to be an affordable measure to support lower income earners,' Deputy Morgan told the This is Guernsey online news service.

Personal tax allowances for single people are set to rise from £7,000 to £7,500, and married couples' allowances will increase from £14,000 to £15,000. Deputy Morgan said these changes came about as a result of two unexpected and very large payments of income tax from two companies totaling around £6 million.

This is Guernsey reported that the only increase in indirect taxes was an increase in the price of cigarettes by 17p; all other indirect taxes remained at their current levels and although Deputy Morgan said he would not rule out any future rise in direct taxation he confirmed he was not aiming to increase taxes to raise more revenue at this moment in time.

The Guernsey government has been able to place £5 million into its contingency reserve fund. It spent £37 million on projects this year and expects to increase that figure to £52 million for the oncoming year. Although Guernsey's economy appears relatively robust, Deputy Morgan warned 'we only need one more event like 11 September to hit the world economy very hard. Before 11 September, the market had fallen very considerably. It recovered well, but it's still down 25 per cent on the year before.'

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