Jersey wage taxes higher than global average, report says

A report said the Government of Jersey received 55% of its tax revenue from income, profits and capital gains

Income tax collected in Jersey accounts for a higher proportion of the government's total tax income than almost anywhere else in the world.

Statistics Jersey has published a report into "government employment, revenue and expenditure" to show how the government compared to others.

It said 69% of tax revenue came from wage and salary taxes in 2021.

The report said this was much higher than the international average of 52% in the same year.

In Jersey, the government collects tax on income, goods and services.

But unlike other governments including the UK's, it does not collect on capital gains or inheritance tax, while the standard rate of company tax is 0%.

'Highest proportion'

Figures from other international member states of the Organisation for Economic Co-operation and Development (OECD), which aims to stimulate growth and trade, were looked at in the report.

The report said: "Of all the jurisdictions compared, Jersey had the highest proportion of tax revenue collected from taxes on wages and salaries at 69%, compared with an OECD average of 52%."

It added Jersey's tax revenue as a percentage of its Gross Domestic Product (GDP), which measures the local economy, was 22.9% in 2021, compared to 33.5% in the UK and 34.2% across the OECD.

Out of all the governments compared, Jersey had the lowest proportion of tax received from goods and services at 16%, the report said.

The report used already published information from Statistics Jersey, departments of the island's government and international organisations like the OECD and the European Union (EU).

Statistics Jersey's report also found that the proportion of people working for the Government of Jersey had been stable for 50 years.

It found that when taking into account both private and public sector workers, Jersey's proportion of employment in "public administration, defence, education, human health and social work activities" was the same as the EU average at 24.1% and only slightly lower than the UK (24.7%).

Low expenditure figures

The report added Jersey's government expenditure as a proportion of GDP was at 28.1% in 2021.

In the same year, the EU average in the same category was 50.2%, the UK was at 48.2% while Guernsey's figure was 29.0%.

Out of the government's compared in the report, only Ireland (24.8%) and the Isle of Man (24.0%) had lower expenditure figures.