The States can expect to raise more than £3m. extra in duty from motorists, property owners, smokers and spirits drinkers in 2010 in what Treasury Minister Charles Parkinson describes as a ‘conservative budget’.

Although the Treasury and Resources Department is taking a tough line on States spending, the ongoing structural deficit in States finances does require more revenue-raising measures.

It is recommending increases in all categories of indirect taxation except for wines, beer and cider.

The following proposals are contained in the 2010 Budget:

• 15% on tobacco – 40p on the average packet of 20 cigarettes, raising £500,000
• 15% on spirits – equivalent to £1.26 on a 25-50% ABV litre bottle, raising £250,000
• 15% on motor spirit – 4.8p a litre, taking duty to 37p a litre, raising £1.7m.
• 10% on all TRP (Tax on Real Property) tariffs – less than £10 a year for a typical home, raising £1.2m.
• No increase in duty on beer, cider or wine – keeping duty rates competitive with rates in Jersey.

The Department announced today in the 2010 Budget that it intends to investigate the introduction of a higher duty rate for strong beers and ciders and review the bandings for duty on spirits.

A review of the tariff structure for TRP is also planned, with a simpler structure for commercial categories to be considered.

The Department has not made a recommendation for personal income tax allowances for 2011. It has delayed any decision until late next year to allow the States’ financial position, and the inflation rate, to be taken into account.

Deputy Parkinson said:

‘Given the planned revision of our corporate tax system and the current economic climate, these Budget proposals are deliberately conservative. It’s just not possible for us to do much more when we cannot model the likely short-term effect on States income either when a new regime is introduced or in the run up to it.

‘I remain concerned about our annual structural deficit and look forward to our work on reviewing the States Fiscal Strategy with the intention of restoring States Finances to a position of long-term fiscal balance.’