Guernsey's 2012 budget includes tax rises

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Taxes on petrol, alcohol, tobacco and property rise for the third year in a row, in the budget proposed for the States of Guernsey in 2012.

The rise in the duties came into effect at midnight, but will be debated in the December meeting of the States.

The budget includes a 1.7% increase in income tax allowances - a £150 rise for a single person.

The Treasury and Resources Department said the financial position was improving with the deficit reducing.

Minister Charles Parkinson said the anticipated deficits for 2011 and 2012, of £30m and £27m, were less than previously anticipated and down from a £37m deficit recorded in 2010.

2012 BUDGET PROPOSALS

  • 6.5% increase in tobacco duty - 21p on an average pack
  • 3.0% increase in alcohol duty - 1p on a pint of beer, 5p on a bottle of wine and 30p on a litre of spirits
  • 9.8% fuel duty rise - 4p per litre (no change for marine use)
  • Tax on Real Property rise by 20% domestic - £20-25 per annum for the typical property - and 3% commercial
  • 1.7% increase in personal income tax allowances
  • Rise in income tax caps by 10% - non-Guernsey income to £110,000, all income to £220,000, fixed charge to £27,500

The deficit is covered by funds from the contingency reserve, and Treasury and Resources is asking for £27m to be transferred to the department to cover the 2012 deficit.

The department said the Financial Transformation Programme, which aims to reduce States spending by £31m by 2015, was expected to deliver £5m of savings by the end of 2012.

It has previously said the majority of the reductions would occur in the latter half of the five-year programme.

All States' departments have been assigned a general efficiency target to help meet the programme's overall targets.

Treasury and Resources said the current deficits could be eliminated by 2014 through a combination of economic growth and expenditure restraint.

The States total spending for 2012 has been suggested at £361.8m.

Under the proposals the Health and Social Services Department would continue to have the largest budget with £109m, with Education the second biggest at £77m.

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