A Tax System with Fairness and Sustainability at its core
“Reform Jersey believes that tax is the subscription fee we pay for living in a civilised society. We believe that each should contribute according to their ability to pay, rather than how much they benefit from public services. Taxes should be fair and sustainable.”
Jersey’s tax system has evolved in a haphazard and incoherent way since the introduction of 0/10. It is no longer fit for purpose and has contributed to the States’ public spending deficit. There is an injustice that many businesses continue to trade and make profits in Jersey without paying tax. Meanwhile, many middle earners feel increasingly squeezed by new taxes like the Long-Term Care tax, which exempt the wealthiest Islanders from paying the full rate. Our system must be reformed to ensure that Islanders and businesses are all contributing fairly.
Jersey’s “low-tax low-spend” model is broken. The current government has attempted to introduce stealth taxes (which they refuse to call taxes) to make up for the fact that our Income Tax and Corporation Tax systems are not raising the revenue we require to pay for our public services. We will oppose these stealth taxes and support honest reform of our tax system.
Jersey’s two-tier Income Tax system is unnecessarily complicated and unfair. The “20 means 20” system no longer really exists, and many middle earners feel too squeezed by the tax burden. We pledge to simplify our Income Tax system by moving to one tax calculation, reducing the marginal rate of tax by 1% and allowing all taxpayers to claim tax allowances. We will propose this change in the 2019 Budget.
This will ensure that 95% of taxpayers receive either a tax cut or a tax freeze. Only the wealthiest 5% of Islanders will pay slightly more. Under this policy, a family with two children and with both earners on the average wage, would receive a tax cut of £385 a year. Overall, this policy will raise £6m per year, which we will put towards improving our public services, including Higher Education funding.
We will support the end of the sexist system which prevents women from discussing their tax affairs with the States without their husbands’ permission, by moving towards personal taxation (as opposed to household taxation) by 2019. We will move to put tax returns online, which will save money in administration costs, and eliminate queues at the Tax Department.
It is vital that the 0% tax rate remains for the investment businesses in the Island which depend on tax neutrality to remain viable. However, it is wrong that so many businesses trading in Jersey continue to make profits without paying tax. We must work to establish a level playing field where businesses contribute their fair share, in proportion to their profitability. We do not believe that stealth taxes, such as the Waste Disposal Charge, are a sensible alternative.
High Net Worth Individuals
Reform Jersey secured a change to the rules for HNWIs to ensure that their tax liability can be periodically reviewed and increased by RPI (inflation) to ensure that they are contributing a fair amount to live in Jersey. We will ensure that this continues in the future.
Reform Jersey remains resolutely opposed to any increase in GST. It is a regressive tax which disproportionately affects the poorest Islanders. We have always supported propositions to remove GST from food and hygiene products.
We will abolish the tax cap on the Long-Term Care charge so that all Islanders pay the same rate, rather than allow the wealthiest Islanders to pay a lower rate.<< PREVIOUS NEXT >>