Treasury braced for big hit in tax revenue
Thursday 5th March 2009, 2:55PM GMT.
PLUMMETING interest rates and bank profits could wipe out the equivalent of the GST takings entirely next year.
The Treasury department is bracing itself for a serious hit in tax revenues over the next couple of years as the credit crunch continues to bite. Senior States and finance industry figures have said that the damage could be around £50 million – the equivalent of a full year of the 3% sales tax.
This year’s tax will take a hit from reduced interest rates affecting saving income, reduced business profits, affecting income tax and less retail spending, affecting GST. But next year’s receipts will take a heavier hit for reduced business profits because corporate income tax is based on the previous year’s figures and the 2009 profits are expected to be much lower than those in 2008.
The JEP has spoken to a number of sources in the States and in the finance industry, who put the damage to tax receipts at between £40 million and £70 million.
Pictured: Cyril Le Marquand House, the home of the Treasury
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Any bets AGAINST gst going up – thought not !!!
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not enough eggs…………how many people have said this before…..we are too dependant on 1 industry….
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Hopefully our tourism industry will pick up and hopefully the states will do what they can to help it. Cruise ships could bring in many people if enough work was done, on a cruise in Belize recently the ships anchored a long way from the shore around 5 miles and extremely fast shore side boats took passengers from ship to shore, the boat trip was the most exciting part of the day.
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That looks like balanacing the States’ books over the next couple of years will take up most of the stabilisation fund and then we will have 6 – 9 % GST in 2011 – 2012 when that runs out.
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Well they did introduce the zero 10 policy….
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I guess we can’t blame our politicians and the council of ministers for failing to see this coming earlier…they have always promoted the view that Jersey is somehow sheltered from global events, and I guess they even managed to convince themselves that this was actually the case.
Unfortunately the harsh reality on the ground has not, does not and will not conform to this cosy political view.
The time to face the facts is well overdue. It takes courage to change course and it’s decision time, big time.
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All the little people earning a few hundred pounds per year interest on their money, now interest rates are near zero the government will get zero in tax. I bet they hadn’t thought of that one last year!
Maybe the States should look at taxing everyone at 20 means 20 then they would get a lot more in. However the biggest earners wouldn’t like that would they and they might threaten to leave? Nevermind the States can always tax the rest more and more as they think they can’t do anything about it.
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If all the people involved with the finance industry were to leave there would be enough room to revive the cider and wool industries.
I don’t think we should go back into salted cod from the Grand Banks because cod are a bit scarce but there might be some point in reviving the Gorey oyster trade with its associated shipyards.
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