In July, Deputy Susie Pinel announced plans to shift the 45,000 Jersey residents paying tax on their previous year’s salary to a same-year arrangement, arguing that the move would help Islanders whose income had dropped this year due to the Covid-19 outbreak.
For those whose payment regime would be changed, their 2019 liabilities would be suspended until 2023 and potentially paid back over a five-to-ten-year period. Around a third of Jersey taxpayers already pay tax on current-year earnings.
The move has been met with opposition, with former politician Ben Shenton lodging a petition, which has received more than 5,000 signatures, calling for those moved to a current-year basis to have their 2019 tax year written off. In response, Deputy Pinel said that a write-off would leave the Treasury £320 million out of pocket.
Since the proposals were first announced, Islanders have had the chance to give feedback via a survey, which was available both online and from parish halls.
And Deputy Pinel has now lodged a proposition to enact her planned changes.
‘This draft amendment to the law would clarify a complex tax system which has been due for review for a decade, and I want to ensure that States Assembly Members have time to give full consideration to the proposal,’ she said.
‘The timetable of this proposal enables us to protect Islanders who would, under the current system, face a substantial tax liability for 2019, while also seeing a drop in their income due to the outbreak of Covid-19.’
She added that if her proposals were approved, taxpayers on the payment-on-account system, under which two annual lump sums are paid, would have their usual November payment deferred.
The debate on Deputy Pinel’s tax reform proposals will be held on 3 November.