Corporate tax reform plans defeated again

Similar plans to reform corporate tax were defeated last year

Plans to raise taxes on the profits companies make in Guernsey have been rejected by politicians.

Deputies Charles Parkinson and Liam McKenna had put forward the scheme as an alternative to increasing income tax.

Their proposal was defeated by 21 votes to 14.

Last year a similar plan from the same deputies received 11 votes with 29 voting against it.

Policy and Resources (P&R) has suggested as part of its 2025 budget a temporary increase to income tax of 2p in the pound, increases to tax free allowances and tax reform including a GST.

President of P&R Lyndon Trott suggested adopting Parkinson's proposals would lead to businesses moving elsewhere.

Parkinson's argument focussed on the current corporate tax regime putting the burden of funding public servants on the island's middle classes.

Currently under the zero-ten corporate tax regime most companies are not taxed on the profits they make, whilst the biggest firms pay 10% tax.

Parkinson said the regime was unfair and wanted to see it scrapped.

One of Guernsey's biggest business groups, the Guernsey International Business Association wrote a letter to all deputies opposing Parkinson's plans for a territorial corporate income tax.