20 October 2015
The Treasury Minister, Senator Alan Maclean, has lodged the draft Budget Statement 2016 with the States Assembly.
The draft Budget 2016 proposes measured changes to taxation which secure long term sustainable public finances while pursuing the States’ health, social and environmental policies.
Senator Maclean said “This Budget does not introduce sudden change but takes a phased approach to a number of measures which will help us to strengthen our structural position and provide us with the flexibility we need to minimise the level of any future public charges, such as the health charge. We need to support our ageing population by targeting our resources and protect ourselves against the risk of lower levels of future income.”
This Budget has been designed to:
- build on the foundations agreed by the States Assembly with the adoption of the Medium Term Financial Plan 2016 – 2019
- address the long-term sustainability of public finances
- address inequities and promote fairness in the tax system
- allow for flexibility over the MTFP 2016-2019 in the level of any additional public charges
- provide contingency against downside risks to future tax revenues
- further the priorities of the Council of Ministers through capital investment in IT and infrastructure.
Senator Maclean said that all of the measures in the Budget also supported the long term approach to ensuring that Jersey’s taxation system is low, broad, simple and fair. “This Budget begins the work that we need to do to address inconsistencies in our system, whether that is about gender bias or phasing out allowances which can no longer be justified and may challenge the long term health of our finances. We will work closely with other departments to make sure that our tax, allowance and benefits system align to make sure that we are still supporting lower earners and vulnerable members of our community.”
The measures and future work for the Taxes Office outlined in the Budget are:
- a 0.9% increase in exemption thresholds with the exception of those for age enhanced exemptions for taxpayers aged 65+ which will be maintained at current levels
- limiting entitlement to age enhanced exemption thresholds from 2018 year of assessment
- phase out mortgage interest tax relief from 2017 over a ten-year period
- phasing out of standard child allowance and additional personal allowance for standard rate taxpayers while maintaining the higher education allowance. This will be subject to plans brought forward by the Council of Ministers to help Islanders with the cost of child care
- increase the relief available on regulated child care for pre-school children from £12,000 to £14,000
- reduce the £1,000 tax exemption on benefits in kind to £250
- the removal of tax relief for people not resident in Jersey who receive income from Jersey
- prepare the income tax system for the introduction of same-sex marriage and bring forward options for independent taxation
- invest in online services for tax administration to allow online declarations and self-assessment
- impôts have been increased by 1p per pint on standard beer and cider, 2p on wine, 35p on a packet of cigarettes and 1p on a litre of fuel.
The draft Budget 2016 will be debated by the States Assembly on 15 December 2015.
Download Draft Budget Statement 2016 from States Assembly website (size 1.57 mb)