Prudent budget and promise for tax refunds | KPMG | GI

Picardo opts for prudent budget and promises tax refunds

Prudent budget and promise for tax refunds

KPMG’s Darren Anton reviews the tax changes announced in the 2017 budget delivered earlier this week

1000

Associate Director: Tax

KPMG in Gibraltar

Contact

Related content

money

The Chief Minister delivered, what he himself called, a prudent budget on Monday 26 June 2017 and this was probably expected by most people given the current position and uncertainty on Brexit. 

For tax, it meant that the changes were minimal: there was the usual round of increases to personal tax reliefs and allowances, the minimum wage, duty on plastic bags (up to 10p), waterpipe tobacco, tobacco-related products and diesel, whilst business and utility rates remained unchanged.

Social Insurance rates also remained unchanged following the increase earlier in the year (the first in seven years) and the reform of the Social Insurance system looks likely to happen once the UK and Gibraltar have left the EU, although the consultation on implementing the introduction of pensions for private sector employees has now been restarted. 

There was also the annual cutting of import duty of certain goods and this year’s theme was in relation to certain sporting goods (ahead of the 2019 Island Games), handbags, jewellery and prams (which the Chief Minister confirmed had nothing to do with the “good news on his own family”).

More good news was for those wishing to store their classic cars or gold bullion securely in Gibraltar with the import duty being cut on these items, although those looking to buy a jet ski will now have to pay an import duty of 20% (to help reduce the number of riders in Gibraltar waters). 

On the tax administration side, the Income Tax Office continues the digitising of all taxpayers’ files and records. For corporate taxpayers, changes to the filing options will be introduced. Companies will be able to complete machine-readable tax returns, file on-line and there will be bulk filing facilities for tax practitioners. These are the initial stages of implementing a digital tax system in Gibraltar and as a tax practitioner, I believe this will benefit taxpayers, advisers and the Income Tax Office.

Lastly, the Chief Minister came prepared on the issue of tax rebates (or lack of) with four pages of the budget speech dedicated to this topic. Without going through the whys and wherefores for the delay in repayments, the good news is that the Chief Minster has assured us that the Income Tax Office will catch up with the people who are owed money (a cumulative £29.1m), as well as the people who owe the Government (with £28m owed by taxpayers)! 

© 2017 KPMG LLC, an Isle of Man limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

Connect with us

 

Request for proposal

 

Submit