Guernsey income tax increase proposals likely

Lyndon Trott said last year's £16m deficit would have been covered by a 1% rise in income tax

Guernsey's chief minister has expressed his intention to look at increasing income tax to solve the island's public finance problems.

Last year Deputy Lyndon Trott failed in his attempt to get backing for a 3% increase to income tax rates locally.

"The States showed last year it doesn't want any new substantial taxes at this time." he said.

Mr Trott told the BBC a 1% income tax increase would have covered last year's £16m structural deficit.

Plans to introduce a GST, reduce income tax rates and reform the social security system to address the future deficit were rejected by deputies.

Experts have warned Guernsey is on an "unsustainable" financial path and reform to the island's tax system or spending cuts are needed.

'Amenable to adjustments'

In October Mr Trott - the newly-elected Policy and Resources (P&R) President - is set to publish the only budget his P&R Committee will present before the next general election.

He said in it, he can go some way towards addressing the island's structural deficit.

"I think the States is far more amenable to adjustments around existing taxes and you see that at budget time each year when it comes to alcohol and cigarette duty, alongside tax on real property."

Earlier this week he was told by officials the structural deficit prediction comes in around £16m.

"That equates to just a 1% income tax increase."