The proposed budget for 2008 was released on Friday with plans to increase indirect taxes on the island.

The treasury suggests adding another two pence to petrol duty, putting another 18p on a packet of cigarettes, and raising alcohol duty by 20%.

It also wants personal allowances frozen for the third year in a row, and to put a cap on mortgage interest relief.

Treasury and Resources Minister Lyndon Trott said a healthy economy and increased savings within the States have reduced the tax burden on islanders.

"The overall objective of the Fiscal and Economic Strategy and the Budget is to ensure that Guernsey remains a good place for businesses to operate and to provide well-paid jobs, therefore enabling wages to remain high and to increase," he said.