If approved the goods and services tax could be introduced by 2007

The tax is planned to cover a �100m shortfall when a zero-rate corporation tax starts, possibly as early as 2007.

It is believed to be vital for the island's finance industry to stay competitive in the future.

Senior citizens are preparing to gather in Jersey's Royal Square on Tuesday to campaign against the proposals for the VAT-style goods and services tax.

Silent protest

Jersey Institute of Directors has suggested raising the goods and services tax to 10% so income tax to could drop to about 10% as well.

But Senator Stuart Syvret has criticised this saying it would favour richer islanders.

Deputy Geoff Southern says a 2% rise in income tax and higher social security payments could replace the plans being put forward by the Finance and Economics Committee.

Senior citizen say the planned tax increase will put extra pressure on people who can least afford to pay more.

They are calling for children's clothing, medical supplies, books and newspapers to be exempt from the levy, saying it will have a huge effect on pensioners, families and people on low and middle incomes.