Treasury Minister Susie Pinel’s proposition to reform the personal tax system for couples who are married or in a civil partnership was approved by Members by 40 votes to two. Deputies Trevor Pointon and Steve Ahier voted against. Senator Kristina Moore abstained.
The move is intended as a step towards ‘independent taxation’, under which all taxpayers will be treated the same way, and follows calls for gender equality in the tax system.
Following the approval of her proposals the tax laws will be reformed to:
- Create joint responsibility for married and civil partnership couples to submit a joint tax return from 2021 onwards
- Give those couples equal rights of access to tax information and liability for the payment of outstanding taxes
Previously, married women have had to have their husband’s permission to discuss and declare their tax affairs. Couples can already choose to be assessed individually.
Deputy Pinel is now responsible for bringing the necessary legislation before the States this year to change the law.
Outlining her proposition, the minister said that changes to create an independent taxation system would take several years to implement so that low income Islanders, who could lose certain tax breaks, will not be adversely impacted by the changes.
‘This is long overdue and I’m proud to be leading this work and determined to deliver it,’ the minister said.
‘There will be fundamental changes and it will take time to deliver our goals, while avoiding hardship for lower income citizens.’
Deputy Pointon said that he was concerned that joint responsibility could mean someone in a marriage or civil partnership being liable for debts incurred by their spouse or partner.
He added that this could be particularly problematic in ‘coercive relationships’.
Senator Kristina Moore, chairwoman of the Corporate Services Scrutiny Panel, abstained from the vote citing concerns her panel had raised about the possible impact on vulnerable Islanders because of the shared liability. The panel supported the move to address gender inequality within the system but said it should be dealt with at the same time as the wider tax reforms.
‘We are all trying to achieve greater equality but I find the Treasury lacking in this respect,’ she said.
Deputy Ahier expressed similar and voted against the proposition.
Constable Richard Buchanan said that the move could also have ‘unseen pitfalls’ and create tax loopholes that would cause a loss of revenue.
He urged the minister to be ‘cautious’ with her reforms but said that the proposal was a ‘good step forward’ to remove ‘anachronistic’ laws.
Social Security Minister Judy Martin pointed out that any negative impact on low earners could be mitigated by welfare, such as tax credits.
