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Guernsey States to consult islanders on tax reform

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Further proposals are due to come back to the States in July 2022

Guernsey's Policy and Resources Committee is set to consult islanders on wide ranging proposals for reforming the island's tax system.

It said the reforms were needed to deal with a gap in revenue of £87m.

The original proposals discussed in the tax review States meeting on Thursday were to give the green light to an investigation into introducing a goods and services tax.

However, they were replaced after a late proposal by committee members.

Politicians also voted to approve an investigation into how the island may reform its corporate tax regime.

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Analysis by BBC Guernsey Political Reporter John Fernandez

"Putting lipstick on a pig" - that's how one politician described the watering down of plans to reform the island's tax system by Policy and Resources (P&R).

In the end though, P&R can leave the States with what looks like a victory - they've got a mandate to come back with whatever proposals they want.

Goods and services tax, income tax hikes, environmental tax and even corporate tax reform.

The tough task will be selling it. This time around, the committee admitted they'd not explained their proposals well enough - if they come back in July with similar issues it could be a little more politically problematic.

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During the next seven months, the committee will consult politicians and the public about how the tax base can be broadened.

Proposals are then due to come back before the States in July 2022.

Deputy Mark Helyar
Treasury lead Deputy Mark Helyar said it was "essential" to make sure people were on board with any possible tax rises

Treasury lead for P&R Mark Helyar acknowledged the timetable would be "difficult", but said several of his colleagues had volunteered to assist the process.

He said: "We really do want to get the facts out there and get them straight with the public so they understand the basis for the decisions we're going to make next year."

Deputy Helyar added it was "absolutely essential" to get people in Guernsey to support any tax rises and assure them they were "completely necessary".

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