SMOKERS, motorists and spirit drinkers will be hit hardest by duty increases in 2010, Treasury has revealed.
In what the department’s minister described as a ‘conservative’ Budget, increases have been recommended in all categories of indirect taxation except for wines, beer and cider.
Duty on tobacco, fuel and spirits will increase by 15% as Treasury admitted the ongoing ‘black hole’ in States finances required more revenue-raising measures.
Homeowners will also pay more as tax on real property will increase by 10%.
It is planned that the States will raise more than £3m. through the increases.
Treasury also announced it was taking a hard line with States departments over spending. Most are facing a budget freeze for 2010, except for additional funds to meet increased Social Security contributions and pay awards agreed in previous years.
Treasury minister Charles Parkinson (pictured) said the Budget had been compiled against the backdrop of the upcoming review of zero-10, which has cast uncertainty over the outlook for States finances.
‘Given the planned revision of our corporate tax system and the current economic climate, these Budget proposals are deliberately conservative,’ he said.
‘It’s just not possible for us to do much more when we cannot model the likely short-term effect on States income either when a new regime is introduced or in the run-up to it.’
Deputy Parkinson also confirmed that next year the island would have a £19m. operating deficit which would increase to £42m. after capital expenditure was taken into account.
‘I remain concerned about our annual structural deficit and look forward to our work on reviewing the States Fiscal Strategy with the intention of restoring States finances to a position of long-term fiscal balance,’ he said.
The increase will see duty on an average packet of 20 cigarettes increase from £2.69 to £3.09.
Deputy Parkinson said there was strong evidence worldwide that the demand for tobacco was price sensitive.
‘Furthermore, the continuing real-terms increases in the duty on tobacco are a powerful motivator for smokers to quit and to deter young people from starting smoking,’ he said.
Duty on alcohol has risen by 84% during the last five years and Deputy Parkinson said Treasury was aware that some of the duty levels locally were above those in Jersey, which was why the department decided to increase tax on spirits only.
The 4.8p a litre increase on fuel – both petrol and diesel – will see duty rise to 37p per litre.
‘The department believes that there are sound environmental, social and fiscal reasons for increasing the duty on motor spirit,’ said Deputy Parkinson.
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Article posted on 20th November, 2009 - 2.30pm
6 Article Comments
Conservative budget indeed. Don’t they realise that people have lost their jobs and haven’t got much money to live never mind paying more taxes. They haven’t shown constraint themselves and have wasted the taxpapers money and now they want more of our money in the form of stealth taxes. As for property tax raises, I think they are immoral. Just because you own a house doesn’t mean you have any money what with mortgages and living expenses etc. My own went up from just over £100 to nearly £600 at the beginning of last year and now they want another 10% on top. How can anyone afford that especially if they are single or on the pension. We should all refuse to pay this hike and suffer the consequences. Wages won’t rise to match it. What is this Island coming to. It is very expensive ot live here and we seem to be giving more of our wages to the government every year. Do they want more people to live in relative poverty?
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Message to all smokers.
£3.09 out of what you pay for a packet of ciggies
will be tax.
Get it into your minds that each of those £3.09’s will be funding one of Trott’s worldwide jollies and then decide if you want to give up or not.
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Either Mr Parkinson has got his maths wrong, or this island is on a very nasty downward slide.
Like Teresa, I too have been hit hard in the pocket this year, and I dont smoke, hardly ever go to a pub, and drive a mini.
As for the property taxes, when I asked for explanations, the Cadastre passed the buck,the Douzaine totally ignored me, and a States Deputy told me it wasnt his fault so the best thing to do was just pay up. Now they want another 10%.. but what am I paying for? And this is supposed to be a democracy?
The Guernsey Press reported (more years ago than I dare to remember) that Guernsey people were some of the happiest in the world. We were.. what happened? Global recession..no, the roots of our problems are more closer to home.
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TERESA!
I couldn’t agree more; these politicians make goo goo noises and smiles at the babies, but behind that mask is the devil himself.
I would never trust these people, they say one thing and do the opposite.
But Guernsey people do have a choice; at next election choose only local people; as we did a long time ago; People who were willing to do a job for the benefit of the Island.
Today because of the high wage they are paid (in comparison to working people) and they still want more; make no mistake if it is passed; these stealth taxes; then as sure as there are little green apples they’ll want a rise in their wages; that’s what the taxes are for.
If they can’t manage the job Then do the decent thing and get out.
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Just dont mention Income Tax as it hits the ruling elite.
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These ruling bodies aren’t for the people of Guernsey at all.
Their only concern is to make money for the rich and inglorious lot; whose only concern is their own welfare.
These velvet tongued people are laughing at the Guernsey people for allowing them the scope they have.,
But one day.. they’ll rue that day when the people wake up– let the world know how the Island is being treated. spread the news–
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