Comments Paper on proposed Personal Tax Reforms published
3rd February 2020
A comments paper published today by the Corporate Services Scrutiny Panel on the Government's proposed reforms to personal taxation has expressed concern over the potential impact they may have low income families and children, and recommends that the Government should deal with gender inequality in the tax system at the same time as a move to independent taxation.
The Personal Tax Reforms (P.119/2019) contains the Government's plans to reform the tax system across 2020, alongside indicative plans for further stages of reform. These include an aim to provide equal right of access to tax information, and create joint and several liability for the payment of outstanding taxes, except for where couples have opted for individual assessment.
The Panel received two submissions from significant stakeholders, and held a public hearing with the Minister for Treasury & Resources to gain a greater understanding of the proposed reforms. The Panel also met privately with the Jersey Chamber of Commerce to clarify their views on this subject. The Panel found that stakeholders were supportive of both gender equality and moving to independent taxation, but were concerned about the effect these reforms would have on couples with a joint income of £30,000 to £50,000, and the risk and responsibility joint and several liability would place on a second earner or non-earner (be they male or female), as they would be legally liable for the tax debt of their spouse.
Based on the evidence it has collected, the Panel is supportive of the principle of gender equality in the tax system, but acknowledges that there is a tension between the need to move quickly towards gender equality in tax legislation and the wider reform agenda for individual taxation. The Panel believes that gender inequality in the tax system should be dealt with at the same time as the move to independent taxation, which would save significant resources and address risks surrounding joint and several liability.
Deputy Steve Ahier, the Panel's Vice-Chair, commented:
"We are appreciative of the work conducted the Minister and the Tax Policy Unit, but we are concerned about the effect this proposition may have on low income families and children, and the inherent risks posed by a move to joint and several liability. We would urge the Minister to give further consideration to this mater. If the Assembly accepts this proposition, it is likely that we will conduct a second review once the draft legislation is lodged, to ensure that it meets both the principles agreed by the Assembly and the expectations we have outlined.
Whilst we as a Panel support moving to independent taxation, we would urge the Minister to introduce this at the same time as dealing with gender inequality in the tax system."
You can read the comments paper here.
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