Responding to the second consultation document on Guernsey's Future Taxation Strategy, Social Security Minister Mary Lowe stated that she was "very disappointed" to see social security contributions the preferred source of income to replace the loss of company tax in 2008, rather than a general sales tax.
According to Deputy Lowe, a proposal to both increase the contribution rate and almost double the upper earnings limit will mean that everybody who contributes will pay more, and high income earners will pay substantially more. This would mean that self-employed people earning £60,000 or more per year would see their contributions more than double, from £3,604 to £7,800 per year, she explained.
The minister argued that the proposal would also hurt those on low incomes, rendering the pledge to protect the least well-off ineffective.
"Our submission in response to the first consultation document seems to have fallen on deaf ears" remarked Deputy Lowe.
"I'm not convinced that a General Sales Tax is such a non-starter as some people are saying," she added.
Deputy Lowe complained that her department hadn't been sufficiently consulted on the proposals, beyond providing statistics when required.
"You can't make your mind up from the document as they brush it aside in just a few paragraphs without any details on how it would affect individuals. They mention the need to protect people on low income. But low income earners will be caught up in the extra social security contributions if that goes ahead," she argued.
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