15/04/21

GUERNSEY: Sark's Chief Pleas votes to review tax system for first time in 20 years.

As published on bbc.co.uk, Thursday 15 April, 2021.

Sark's government is set to consider changing its tax system for the first time in 20 years.

The island's Chief Pleas has never collected income tax, instead relying on a system of levies to raise revenue.

The current system sees the majority of income come from a property tax on houses and a personal tax on residents who have a property available to them for 90 nights a year.

Politicians voted unanimously to approve the plans for a review.

The island has a population of about 500 people, and also does not have capital gains tax, inheritance tax or sales tax.

Chairman of Sark's Policy and Finance Committee John Guille acknowledged raising income tax is "never a popular subject", but described an examination of the tax system as "necessary".

He said: "With the welcome influx of new residents, the island's infrastructure needs to evolve to enable Sark to accommodate this growth."

Long-time Sark resident Mary Nicolle said the move was long overdue and expressed her hope the review will lead to a fairer system for residents.

She explained the cost of having to pay for healthcare and sending children to Guernsey for education is leading to real difficulty for people who are not wealthy.

"All those things combined, alongside there being no pension and no welfare support, mean it does seem to be getting a lot tougher here now," Mrs Nicolle added.

Businessman Sven Lorenz said while the current tax regime is attractive, it is the right time for reform to be considered.

He set up a business last year to bring people of high net worth to Sark which resulted in more than a hundred new arrivals.

He said he expects the review will be a "long project" as there are many "complex questions" to be answered.

"There are challenges in the future, the infrastructure of Sark needs investing, it's an aging population so there's a question of how will the tax base develop in the future," he added.