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Bright Future For Guernsey With Balanced Budgets, Says FM

by Jason Gorringe,, London

15 October 2014

Guernsey's Minister for Treasury and Resources, Gavin St Pier, has said the future is bright for Guernsey with its Budget now on an even keel.

He said this year's Budget marks the end of three years of austerity to balance Guernsey's finances, being the first time since 2008 that the territory announced plans to move out of deficit.

St Pier commented: "This balanced Budget means that the era of deficit funding, of spending more than we earn, is coming to an end."

"Setting up an Economic Development Fund that invests in our future economic growth, and repositioning our reserves in order to increase investment returns to fund future infrastructure, demonstrates that we are now better placed to plan for the future."

"The stability and prudence of the past few years, and the necessary continuation of expenditure restraint, means that there are only limited [tax] measures proposed [in the Budget] to raise additional income, and this means that the burden can be spread more evenly and fairly."

For businesses, the budget included the extension of the ten percent income tax to licensed fund administration business; an increase to the exempt company fee; an increase to property tax rates by between five and ten percent; and changes to personal taxes and duties.

For individuals, the Budget included a freeze in personal income tax allowances; increases to duty on tobacco and alcohol of about 3 percent; and a 15 percent increase in the domestic tax on real property.

St Pier said: "Basic personal and additional income tax allowances remain at the same level as in 2014, but their wholesale review is being considered as part of a wider range of measures in the Personal Tax, Pensions and Benefits Review, due to be debated in early 2015."

Meanwhile, "the introduction of a new Bank Interest Income Exemption means that everybody with savings will pay no tax on their first GBP50 of interest. This will save thousands of islanders from needing to file tax returns, removing administrative burden from them and the Income Tax Office. It's a common-sense proposal."

The Minister said that progress on the fiscal front will enable the territory to continue to invest heavily in drumming up new business for the financial services industry. St Pier said that the Government had also allocated funds this year to also promote Alderney's financial service offerings overseas.

TAGS: individuals | Finance | tax | investment | business | property tax | interest | Personal Tax | financial services | budget | Guernsey | tax rates | Alderney | services | Pensions | Pensions | Tax

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