However, a government survey released yesterday showed that 52% of respondents support the move to current-year payments.
Senator Kristina Moore has raised the issue after learning during hearings with States officials last week that the extra money raised is due to be ‘ringfenced’ for paying off government debt incurred in dealing with the pandemic.
The Senator, who chairs the Corporate Services Scrutiny Panel, said she was concerned this would mean that middle-earners and those who move to current-year taxation – two-thirds of taxpayers – would be responsible for paying for the crisis.
In July, Treasury Minister Susie Pinel announced plans to move all Islanders to effectively a ‘pay as you earn’ system, with her proposals due to be debated on 3 November.
She said that the move was intended to help those whose incomes had fallen due to the pandemic and would help modernise the Island’s tax system. She also said it would be ‘unfair’ for those who moved to current-year taxation to have their 2019 bill written off, adding that this would cost the Treasury £320 million. The proposal is for those affected to have their 2019 liability suspended until 2023 and for repayment plans to be put in place.
Senator Moore, a critic of the proposals, said she was concerned after learning that the extra money raised by the repayments would be set aside to repay financial deficits created by Covid-19.
‘It’s a question of fairness and if it is those moving from prior-year to current basis who are going to pay for Covid then the burden of this is going to fall on middle-earners,’ she said.
‘We’ve heard about the fairness of not writing off the 2019 tax year for those who move, but is it fair that only people who move to current-year taxation, which is two-thirds of taxpayers, should be paying for this? Surely it’s not fair that only certain people are paying more, while others are not.’
A petition lodged by former Senator Ben Shenton calling for the 2019 tax year to be written off for those affected has gained more than 5,000 signatures and is due to be debated on 20 October.
Mr Shenton also said he was concerned about prior-year taxpayers being ‘made to pay’ for the pandemic, as well as the potential effect on working Islanders. ‘The economic impact of effectively asking people to pay double tax could be immense. The reality is that this could cause real damage both to individuals and to the economy,’ he said.
A government survey of 2,387 people found that 52% of respondents supported moving prior-year taxpayers to a current-year basis, while 38% were against. A total of 42% supported PYB taxpayers paying their 2019 bill over five to ten years. Out of 1,400 comments made by those surveyed 544 spoke in favour of a full or partial write-off of the 2019 bill for those affected.
