Jersey Residents Warned To Expect Tax Hike

by Jason Gorringe, Tax-News.com, London

01 July 2002

Following widespread consultation with Jersey residents on how to bridge a projected gap between income and expenditure, the jurisdiction's Finance and Economics Committee, headed by Senator Frank Walker, has announced that it will present proposals to raise taxes on the Island this week, according to a Jersey Evening Post report.

The newspaper revealed last week that the Committee considers that it has cut States expenditure as far as it can, and is now looking at raising more tax revenue in the short term in order to bridge the gap.

However, in addition to the spending cuts and the tax measures confirmed by Finance and Economics last week, which include freezing personal allowances and exemption limits, axing benefits in kind, and closing tax loopholes used by company directorships, the JEP revealed that the States authorities still need to raise another £8 million, and speculated that this is likely to result in a broadening of the tax base in order to collect more income taxes.

According to the locally-based newspaper, last week's announcement comes several months ahead of the Finance and Economics Committee's final consultation paper on tax reform, which Senator Walker explained was because: 'We want to give the public and groups which have a special interest as much time for consultation as possible. These are the first new tax measures to be seen in the Island for some time.'

However, the JEP reported that the Committee President declined to confirm that the £8 million gap will be plugged by increased income tax revenue.

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