Call to use windfall to replenish emergency fund

An attempt will be made this week to ensure some of the money the States of Guernsey receives through a new tax on businesses is put into the government's savings.

Policy and Resources' treasury lead Charles Parkinson revealed last month the States was set to receive more from pillar two tax revenue than was previously estimated.

Deputies Gavin St Pier and George Oswald want to secure any pillar two tax revenue above £75m from 2025, £77m in 2026, £79m in 2027 and £74m in 2028 for the island's core investment reserve.

The core investment reserve is effectively the island's rainy-day fund, only to be used in emergencies.

The proposals are supported by the island's only political party, Forward Guernsey, of which St Pier is the leader.

In his proposal, St Pier argues the money from pillar two is a windfall and should help rebuild the island's long-term emergency savings fund.

Only very large multinational groups are affected by pillar two, broadly those with annual revenues of €750m (£641m) or more in at least two of the previous four years. Smaller Guernsey businesses are not affected.

Parkinson said there were about 1,200 companies within the scope for pillar two taxes.

St Pier is also leading four other proposals to change Policy and Resources' budget for 2027.

They include a move to look at whether the States should use debt, bond restructuring, reserves and investment funds differently to finance major projects.

That proposal has been seconded by States Trading Supervisory Board President Mark Helyar.

The Forward Guernsey leader is also spearheading attempts to end the stamp duty relief scheme for people downsizing and review the value of the open market tax caps.

Debate on the budget starts on Tuesday.

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