A Word from Our CEO, Murray Norton, September 2026

Taxing Times

Tax has a peculiar habit. When receipts rise, government feels reassured and new commitments can quickly follow. Yet the important question is not whether the public purse is fuller today, but whether income can keep pace with tomorrow’s bills.

Jersey’s personal income tax figures initially look encouraging. Receipts increased from £705.4 million in 2024 to £744.7 million in 2025, while the approved Budget estimates £784.5 million for 2026.

However, personal income tax accounted for around 70 pence of every pound of taxation revenue collected in 2025. This dependence looks less comfortable alongside projections that, within 25 years, Jersey’s population aged over 65 could increase by 45 per cent while the working age population falls by 8 per cent.

That could mean fewer people earning wages, paying tax and making social security contributions, while more Islanders require pensions, healthcare and long term care. Personal tax receipts are not falling today, but the future tax base is under pressure.

GST provides some diversification. Introduced at 3 per cent in May 2008, it raised £32 million during its first eight months and £47 million in 2009. The rate increased to 5 per cent in 2011, with receipts reaching £80 million in 2012, £94 million in 2020 and £126.6 million in 2024.

The 2025 figure was also £126.6 million, an increase of only £20,000. In an inflationary environment, that suggests very limited growth in taxable consumption. Jersey has nevertheless collected approximately £1.55 billion through GST since its introduction, with £132 million forecast from GST and International Services Entity fees in 2026.

Guernsey is now grappling with the same issue. Its latest tax package includes a proposed 3 per cent GST, other tax changes and £20 million of spending reductions. After years of argument, its July debate was adjourned without a final decision and will resume on 30 September. It is a reminder that delaying difficult choices does not make them easier and leaves businesses, households and government unable to plan with confidence.

For Jersey’s new Treasury Minister, Senator Alan Maclean, incoming Chief Executive Paul Wylie and the Council of Ministers, the choices are equally uncomfortable. Government can raise taxes and charges, reduce expenditure, redesign services, increase the working population or deliver stronger economic growth. The answer will probably contain elements of each. Unsurprisingly, government and business would prefer growth, but it is easier to promise than deliver and requires the right conditions for investment.

The Treasury Minister must resist using uncertain future income to support permanent spending. The Chief Executive must turn promises of efficiency into measurable improvements in productivity, procurement and staffing. Ministers must decide which services are essential and which ambitions can genuinely be afforded.

Politically, success will be measured not by promises, but by whether Islanders see better value before receiving higher bills.

Business cannot continually be treated as the easiest source of additional revenue. Employers already face higher employment costs, freight charges, regulation, energy prices and shortages of skilled staff. Increasing those pressures risks weakening the very economy on which future tax receipts depend.

There are always theories about untapped or unrealised revenue streams. Health tourism, medicinal cannabis exports and the economic potential of a tunnel to France might all resurface and possibly contribute one day. But they will all need bold decision-making, but then buoyed by a fresh election mandate, this is a punchy Government.

Long term forecasts will never be precise, but government can establish spending limits, test its assumptions, rebuild reserves and avoid making permanent commitments on the back of temporary income.

The figures may currently be rising, but the underlying pressures are moving in a far less comfortable direction. Jersey’s new Government faces taxing times indeed.