HM Government of Gibraltar has today announced budget measures for the year 2025/26.
The Chief Minister’s address, a copy of which can be seen here, included the following announcements:
Tax and social insurance
- No change to the existing corporate tax rate of 15%
- No changes are being made to personal tax rates
- No changes were announced to import duties
- The maximum cap on social insurance contributions by employers and employees is to increase by 5% with effect from tomorrow, as announced on the 12th of June
- Recurrent Government revenue reported* as including
| Forecast 2024/25
£m |
Actual 2023/24
£m |
|
| Income Tax
Company tax Import duty (incl licences & other fees) Stamp duty Gambling charges, fees & lottery Rates and rents |
260.0
213.0** 100.6 10.2 17.4 36.6 |
255.6
155.4 95.6 12.3 19.8 34.7 |
* For further details, see Draft Government of Gibraltar Estimates of Revenue and Expenditure 2025/26
** the increase of £57.6m from 2023/24 includes an “exceptional” amount of £50m.
Transaction tax
- Some more information was announced about the transaction tax on goods to be implemented as part of the proposed agreement with the EU:
- This will be phased in over three years, starting at 15% in the first year, 16% in the second year, then 17% in the third year
- A reduced rate of 5% to apply to certain goods, for example, childrens’ clothing, works of art, antiques and bicycles
- Certain goods will have no transaction tax levied, for example, food, water supply, pharmaceutical products, medical equipment, books, newspapers and periodicals, solar panels and electricity. This corresponds with the EU’s “super-reduced” rate of 0%.
- Exemptions are to include goods imported but not sold locally, fuel and other supplies to ships, and supplies for aircraft used by airlines
- Annual independent monitoring for any market distortions will allow for the rates to be adjusted.
Other
- The minimum wage is to be increased by 6%, from £8.90 to £9.50 per hour
- A review of stamp duty on intra-family transfers of property to be carried out
- The initiative announced last year to sell personalised number plates has to date raised more than £1.5m in revenue from the sale of more than 700 plates. The Chief Minister referred to further “exciting” developments expected very soon…
- Figures for GDP were announced, as follows:
| GDP :
2024/25 (forecast) 2023/24 (preliminary estimate) 2022/23 (final estimate) |
£3.1bn (up 6.5%)
£2.9bn (up 5%) £2.75bn (up 8.3%) |
For further information please contact either neil.rumford@gi.ey.com or stephen.carreras@gi.ey.com
Neil Rumford | Partner | Tax Services
