And while the new EU arrangements will mean that everyone will pay significantly more in direct and indirect taxes, the Island will remain a ‘relatively low tax area’, says Senator Terry Le Sueur.Two of the likely options to be introduced in five years’ time are a 5 – 8 per cent sales tax (a form of VAT) and 1.5 per cent payroll tax (to be paid by every employer and employee in the same way as Social Security).The sums have not yet been done to show the likely financial impact on people.
The new measures will be needed to make up for changes in corporation tax, which will include a zero rate for some companies and a 10 per cent rate for financial institutions.Senator Le Sueur took the unprecedented step yesterday of outlining the scale of the committee’s dilemma and the options open to the Island.
He stressed that the issue was a high political priority now even though the problem was still five years away.
