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Taxation

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The people of Gibraltar had always been one of the most highly taxed in Europe. The previous Government effectively increased income tax every year by not even increasing allowances to take account of inflation! The view of the GSD from the outset in 1996 has been clear: Government should only take from peoples’ pay packet what it really needs and thus leave as much as possible of peoples’ income in their own pockets to spend on their families as they please.

Furthermore, the GSD sees tax cutting as a means of redistributing a portion of the fruits of our successful economic policy so that it benefits everyone in our community. The GSD has thus ABOLISHED many taxes altogether and has slashed the rate of most others, therefore increasing the take home pay of all workers and income earners in Gibraltar, but especially the lowest paid. Tax has been cut every year since 1996.

This is our extraordinary record:

• • ABOLISHED: income tax for low earners (those who earn less than £ 8000 a year)!

• • ABOLISHED: tax on pensions and Community Care Officers’ fees

• • ABOLISHED: tax on first £10,887 (excluding pensions and community care) on income of senior citizens

• • ABOLISHED: tax on savings and investment income

• • ABOLISHED: tax on student jobs

• • ABOLISHED: death duties

• • ABOLISHED: TV licence fees

• • ABOLISHED: Road Tax

• • ABOLISHED: Stamp Duty on properties under £200,000

• • NEW VERY REDUCED RATES (gross income system) for people without mortgages and other allowances;

• • HUGE CUTS IN INCOME TAX RATES FOR EVERYONE

•   - Incomes up to £15,000 pa – effective tax rate cut to maximum of less than 11%

•   - Income up to £20,000 pa  – effective tax rate cut to maximum of less than 15%

•   - Income up to £40,000 pa – effective tax rate cut to maximum of less than 20%

•   - Everyone now pays tax at an effective rate less than 25% (compared to nearly 50% in 1996)

•   - 7626 Income earners (or 27% of all taxpayers) now pay NO TAX!

• • BIG INCREASES in tax allowances

NEW TAX ALLOWANCES:

• • Nursery fees

• • Health insurance

• • Low income earners’ allowance

• • Low income earners’ tax credit

• • Child studying abroad for all children

• • TAKE HOME PAY HAS RISEN BY 89% (compared to inflation of 37%)!

• • BIG CUTS IN SOCIAL INSURANCE CONTRIBUTIONS for low paid, part time and casual workers. Abolished for students.

• • COMPANY TAX – cut to 10% (from 35%)

• • IMPORT DUTIES – abolished or halved or heavily cut on many goods