No new taxes could lead to a �200m deficit

Jersey faces a budget deficit of between �80m and �100m as the island is cutting corporate tax to encourage finance houses to stay.

The finance and economics committee's president, Senator Terry le Sueur, said a system of VAT and cuts in tax allowances for wealthy islanders was the best solution to make up the deficit.

Islanders are to be consulted on the proposals at a series of public meetings which are due to start in Tuesday.

There is no simple solution Senator Terry le Sueur

Senator le Sueur said: "If the alternative is that they wanted to see the finance industry disappear, they'll see a tax hole not of �80m to �100m, but something in excess of �200m.

"That would be a far more difficult problem to solve.

"There is no simple solution, but we believe the proposals that we have are a fair, equitable and sensible solution in order to maintain the current prosperity of the island."

However, another Jersey politician has said islanders will not have enough time to assess tax changes before they are consulted on them.

Senator Stuart Syvret says there should have been more time between the announcement of tax proposals and the first public meeting, which is due to be held on Tuesday evening.

He said: "This simply is not going to enable the community to have a fully informed, properly involved meaningful discussion on all the taxation options that we could pursue."