QUESTION TIME
On Friday 3 July – ahead of the Public Meeting on the 2026 Tax Reform Package which takes place Monday evening 6 July at 8pm in the Island Hall – the email below containing six questions was sent by the Alderney Chamber of Commerce Council to all Guernsey Deputies and Alderney States Members:
1. The Sub-Committee was barred from the cost side, yet its work is cited to justify GST+
What justifies citing the Tax Review Sub-Committee’s report as validation for GST+ when its terms of reference expressly prevented it from examining expenditure?
The Sub-Committee’s own recommended revenue measures raise a fraction of the GST target, in the order of £3m/year against a GST-plus target in the region of £50m/year.
If the Committee’s own independent review was structurally prevented from testing whether the problem could be solved on the spending side, on what basis can its output be described as having tested GST+ against the alternative of expenditure reform, rather than simply having been asked to find additional revenue?
2. The civil service efficiency claim rests on an unsound comparator
The Policy Letter’s case that the public sector is already lean and cannot bear further reduction (paragraph 5.10 and Figure 9) relies on a headcount- or cost-per-capita comparison with other jurisdictions.
Will the Committee confirm: (a) whether this comparator has been adjusted for the GDP/population denominator issues specific to a small, wealth-concentrated economy; (b) whether consultancy spend has been stripped out or is contaminating the per-capita figure; and (c) whether States-owned enterprises are included or excluded on a consistent accounting perimeter across the comparator jurisdictions?
Without that, the claim that efficiency has already been exhausted is not demonstrated, only asserted.
3. The underlying calculations have not been made public
How were the numbers in the Policy Letter actually compiled, and will the full workings be published?
Specifically: the net revenue figures, the administration cost range (£2.5m–£3.6m/year, of which the headline net figure appears to use the low end), and the implementation cost range (£8.65m–£12.2m) all appear as conclusions without the underlying model being available for scrutiny.
Is it P&R’s intention to publish the calculations, assumptions, and sensitivities behind these figures before the States vote in July, so that the public and States Members can test them independently rather than take them on trust?
4. The cost to business has not been properly assessed
How, specifically, has the impact and cost to business been calculated, given that no business compliance cost estimate appears anywhere in the Policy Letter, and given that P&R only recently issued a survey asking Guernsey businesses how they expect to be impacted?
If the evidence-gathering exercise is still under way, how can the Policy Letter’s net revenue and impact figures already claim to reflect the cost to business? Will the Committee commit to publishing the survey results and revising its figures accordingly before the debate, rather than after? an example here is the impact on Guernsey post, the Alderney Gambling industry and its overall impact on growth.
5. Per-resident costs are structurally higher in small jurisdictions, and this has not been addressed
What account has the Committee taken of the evidence that GST/VAT systems carry structurally higher per-unit costs in small jurisdictions, because fixed administrative costs are spread over a much smaller population?
On the Committee’s own figures, Guernsey’s proposed ongoing GST administration cost works out at roughly £40–£57 per resident per year — well above the equivalent per-resident cost in larger jurisdictions with greater economies of scale.
Has this disparity been explained anywhere, and does the Committee accept that a tax it describes as simpler to administer than income tax or social security is, on its own numbers, disproportionately expensive to run in a jurisdiction of Guernsey’s size?
6. Is GST+ solving the problem, or compounding it?
Fred Brooks’ well-established finding in project management — that adding resource to a problem whose root cause is structural, rather than a genuine capacity shortfall, adds cost and coordination burden faster than it adds progress, and can make the underlying problem worse, applies directly here.
Guernsey’s structural funding gap has been characterised throughout this process as a revenue shortfall to be solved by adding a new tax instrument. Has the Committee tested, with the same rigour applied to GST+, whether the funding gap is in fact a systemic, structural issue (in spending design, service delivery model, or administrative capacity) that a new revenue stream will not resolve and may compound, given the delivery track record set out in Question 3 and the Revenue Service’s own recent history?
Put simply: is GST+ resolving the underlying problem, or is it the equivalent of adding headcount to a project that is already struggling to deliver?
Thank you,
The Alderney Chamber of Commerce |
