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Jersey Budget Boosted By High Income Tax Receipts

by Jason Gorringe,, London

18 September 2012

New statistics published by the Jersey government show that the island is over-performing against the objectives set in its fiscal consolidation plan, with both tax revenues and expenditure savings ahead of budget expectations at the half-year mark.

Figures to June 2012 show that the island's fiscal position is 1.7% ahead of budgetary targets. Tax revenues were GBP13.5m (USD21.9m) ahead of budget, against full-year projected revenues of GBP625.8m, while expenditure was GBP8.2m below target, against a full-year forecast of GBP622.2m. Revised forecasts from the government anticipate that revenues will come in GBP13.5m ahead of budgetary expectations for the full year, while no additional expenditure savings are anticipated.

The government reported that following a 2% increase to the island's Goods and Services Tax rate, from 3% to 5%, receipts from the levy were GBP3m below target. Revenue figures had been propped up by income tax receipts, which were GBP21m ahead of target.

Welcoming the figures, the island's Treasury Minister, Philip Ozouf, said: “A great deal of hard work goes into managing the financial position of the States, both at departmental level and centrally, and it is useful to see that we expect our financial position to be improved on a full-year basis."

"In the context of recent comments concerning the economic assumptions of the Medium-Term Financial Plan (MTFP), I express the hope that this will give confidence that the Treasury continues to be prudent in its forecasting. Whilst this mid-year result is an interim one it is nevertheless welcome. This improved position has already been forecast in the MTFP, which means that spending limits are unlikely to be able to be increased as a result of this mid-year report."

Ozouf confirmed that the government would soon receive an annual report from the island's Fiscal Policy Panel on October 1, 2012, and the government would consider fiscal stimulus, if necessary, against the background of this report's recommendations.

TAGS: tax | sales tax | international financial centres (IFC) | budget | Jersey | offshore | revenue statistics | individual income tax

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