22 November 2013
Two measures proposed in the 2014 Budget will provide a tax cut for approximately 84% of the Jersey tax-paying population, or around 40,000 households, if approved.
The 2014 Budget proposes two key income tax measures:
These tax cuts would not apply to higher earners who are in the ’20 means 20’ tax bracket. and are aimed at stimulating economic growth by putting more money in the pockets of taxpayers.
Example of benefit
For example, a single person with an income of £20,500 will pay £124 less and a single pensioner with and income of £26,000 would pay £116 less.
These proposed changes are also a first, important step towards Independent Taxation as it brings the Marginal Tax Rate and ‘20 means 20’ into closer alignment.
Treasury and Resources Minister, Senator Philip Ozouf said “These are two positive measures which will mainly benefit people earning low and middle incomes. It will put almost £10.3 million back into Islanders' pockets in 2015 at a time when they have experienced a continued squeeze on their incomes caused by the global financial crisis.
“These measures are also an important step towards modernising our tax system and making it fairer for everyone.”
The cost of decreasing the marginal rate by 1% is approximately £7.8 million. The cost of increasing the income tax exemptions by 1.5% will be approximately £2.5million. The overall cost of a 1.5% increase in exemption thresholds, combined with a 1% decrease in the marginal rate, will be approximately £10.3 million.