John Fernandez, a political reporter in Guernsey, has reported that discussions are ongoing regarding the budget for 2026, which may involve tax changes including breaks for landlords, new taxes on vaping, and higher personal income tax allowances. The Policy and Resources (P&R) committee has highlighted a projected deficit of £48 million for the States, emphasizing the importance of maintaining structural balance.
In response to this financial situation, P&R has proposed limited revenue-raising measures amounting to only £1.2 million, which would include increased taxes on cigarettes, petrol, and property. De Sausmarez, the P&R President, characterized the budget as lacking excitement, indicating a potential need for broader tax reform, including the applicability of GST on food and corporate tax adjustments, expected to be discussed before June of next year.
De Sausmarez has attributed the island’s financial challenges to a declining working population, rising demands on health services, and increasing life expectancy. To address the deficit, a combination of modest tax increases and expenditure reductions has been suggested. Recently, P&R has also reported requests from various committees totaling about £30 million above their approved budgets, which were deemed unaffordable.
If the proposed budget is approved on November 4, the increased rate of document duty for property transactions that are not primary residences will be eliminated to stimulate the rental sector. A recent report noted that average market rents have risen significantly. The budget also proposes an increase in personal income tax allowances by £600, raising it to £15,200. Additionally, there will be tax increases on tobacco, fuel, domestic property, and commercial rates, along with the introduction of a new tax on vaping products.
The budget does not appear to address larger taxation mechanisms such as corporate tax reform or the introduction of GST, as discussions are still in progress. Some infrastructure projects, including funding for a sexual assault referral center, have been confirmed in the budget.
Source: https://www.bbc.com/news/articles/c98d044r4m1o?at_medium=RSS&at_campaign=rss