Gibraltar Budget Cuts Tax
The Gibraltar government has recently announced a series of tax measures as part of the 2012-2013 Budget. A major part of the changes is the reduction of import duties as well as cutting personal income tax billed across a number of categories of taxpayers.
The Gibraltar government has introduced a taxpayer favourable budget, which focuses on consolidation efforts rather than limiting government expenditure.
Import duties will see the most widespread modifications. They have been reduced or removed completely for various retail goods. The majority of electrical properties and computer software will be newly exempted from import duties. In addition, duties on perfumes, cosmetics, clothes, jewellery and mobile phone equipment will be slashed by 50%.
In regards to duties on hybrid cars and biofuel; these will be removed and in its place, a cash back system will be implemented for those buying environmentally friendly vehicles. It is also been said that import duties are to be removed on the import of vehicles altered for use by disabled individuals.
Seagoing vessels which are over 18 metres in length will no longer be subject to import duties. The reason for this is to encourage the registration of super yachts in Gibraltar. In contrast, the import duties on vessels less than 18 metres in length will have an abridged 6% rate levied against them. According to the previous administration, vessels that are over 80 tons were immune; however, those less than 80 tons had a 12% rate attached to them.
Cigarettes will see the solitary rise on import duties. The arrangement of import taxation in regards to cigarettes will be restructured. It will go from a rate applied per kilo to a rate per every packet of 20 cigarettes. As a result, this change will add 10p to a pack of cigarettes.
There have also been a number of considerable alterations made to Gibraltar’s Gross Income Based regime and the Allowance Based System.
The government has pledged its desire to decreasing the maximum rate levied on personal income tax according to the Allowance Based System. They have stated that this will be reduced to 15% by 2015-2016. In order to commence the reduction of effective rates, the rate pertinent to the first £4,000 of taxable income will be cut from 17% to 15%. This will exempt taxpayers with incomes of £9,000 or less. Relief will be augmented further in 2013 to exempt those with salaries of £10,000 or less.
Taxpayers receiving income between £9,000 and £19,500 will get enhanced tax relief to even out tax liability difference between tax-paying and tax-exempt recipients. New modifications also target to exempt all disabled working individuals from taxation.