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Briefing Paper published as the Personal Tax, Pensions and Benefits Review enters the next phase of Consultation

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Friday 25 April 2014

Guernsey's Ministers for the Treasury & Resources and the Social Security Departments have published a briefing paper as part of the ongoing personal tax, pensions and benefits review. The note sets out the background on the medium to long term income and expenditure challenges that Guernsey faces, and which inform the ongoing work of the review.

Deputy Gavin St Pier, Minister of the Treasury & Resources Department, and Deputy Allister Langlois, Minister of the Social Security Department, published the note ahead of meetings with Deputies and Departmental Boards, which will take place in May and June of 2014.

The briefing notes sets out detail behind two risks:

as the number of economically active people declines and/or the composition of our economy changes with the finance sector (and therefore finance sector income-related revenue) declining as a proportion of the whole. , particularly as a more elderly population becomes entitled to their old age pensions as well as (probably) having increased health care and long-term care needs.

Risk 1: personal income-related revenue falls as the number of economically active people declines and/or the composition of our economy changes with the finance sector (and therefore finance sector income-related revenue) declining as a proportion of the whole.

Risk 2: expenditure rises, particularly as a more elderly population becomes entitled to their old age pensions as well as (probably) having increased health care and long-term care needs.

Deputy St Pier commented:

"At the heart of this review is a simple principle: for the States to be able to continue to offer the high level of public services demanded in 2025 and beyond, we must have a stable and secure tax base from which to generate revenue in the long-term. Our tax base, at the moment, is extremely narrow, and this poses a risk for the sustainability of our revenues, and so for the sustainability of our public services.

"All of those involved in the review, politicians and public servants alike, are committed to absolute openness in the way the review is taken forward. That is why we have decided to publish this briefing paper."

Deputy Langlois commented:

"Three key issues have been identified as part of the review: first, the need to cap the total amount of money taken from taxpayers to pay for public services; second, the significant over-dependence on direct taxes; and third, the expenditure pressures resulting from aging population and the risk to the sustainability of the Guernsey Insurance and Long Term Care Funds.

"A full and informed public and political debate needs to take place on how to manage the risks and address the issues which the review has highlighted, and hopefully the briefing note we are publishing today will be a useful part of enabling that debate."

The Personal Tax, Benefits and Pensions review will be consulting with States Departments over the next six weeks, and has already undertaken a first consultation meeting in Alderney.

Following this phase of consultation, a more detailed public document will be published in the summer, and it is currently intended that proposals will then be put to the States before the end of the year.

The Briefing Paper can be be downloaded below.

ENDS

Downloads

Personal Tax, Pensions and Benefits Review

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