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2014 budget details

01 July 2014

​On Monday 30 June 2014, the Chief Minister set out the budget for the upcoming tax year commencing on 1 July. Details of the salient points derived from his budget speech are set out below:

The economy

• Gross Domestic Product for the 2011/12 financial year was calculated at £1.17bn, with 2012/13 estimated at £1.28bn.

• The Government’s latest estimates for GDP for the 2013/14 financial year are £1.41bn, which would represent a growth of 10 per cent for the year.

• With major capital expenditure expected over the coming years, the Government expects its initial estimate of GDP of £1.65bn for the 2015/2016 year to be exceeded.

• GDP per capita estimated at £47,066, which would rank third in the world, according to the International Monetary Fund per capital rankings.

• Gross Public Debt stands at 31 March 2014 was £450m and increase of £74m from the prior year figure of £376m.

• Net public debt stood at £354m, and increase of £62.7m from the previous year of £291.3m.

• The recurrent budget surplus for the 2013/14 financial year was £65m, compared to the original estimate of £17m.

Personal taxation

• An individual with assessable income of £10,500 or less will not be liable for income tax.

• An allowance of £3,000 is available for the installation of solar energy for boilers.

• Also under the Allowance Based System, from 1 July 2014:

o The Medical Insurance Allowance is increased from £2,000 to £4,000.
o The Nursery School Allowance is increased from £3,000 to £4,000 (per child).
o Blind Persons Allowance is increased from £3,000 to £4,000.
o Disabled Individuals Allowance is increased from £5,000 to £6,000.
o The Single Parent Family Allowance is increased from £3,000 to £4,000.
o The Personal Allowance is increased from £3,000 to £3,100.
o The Spouse Allowance is increased from £3,000 to £3,100.

• Under the Gross Income Based system, from 1 July 2014:

o A tax deduction of up to £6,000 is available in respect of approved expenditure incurred towards the purchase of a home
o The pension contribution allowance is increased to £1,200 from £1,000.

• The standard rate of tax for individuals is reduced from 30 per cent to 20 per cent.

• Approved employment related loans made to directors and connected persons to cease being treated as earnings from employment.

Social Insurance

• No changes to social insurance contribution rates.



• The standard rate of tax for trusts is reduced from 30% to 10%.


Corporate taxation

• No change to corporate tax rate of 10 per cent.


Import duty

In order to further stimulate the retail sector in Main Street and to continue to make Gibraltar a more attractive destination for shopping, import duty has been reduced with immediate effect as follows:


Item​ ​Import duty
​LED lighting (including torches)  ​0% (reduced from 12%)
​Writing implements, including pens, pencils, ball point pens and felt-tip pens ​0% (reduced from 12%)
​Mobile phones ​0% (reduced from 3%)
​Pleasure craft, yachts and other vessels under 18m ​0% (reduced from 6%)
​Pet food ​0% (reduced from 12%)
​Fertilizers ​0% (reduced from 12%)
​Paper based stationery ​0% (reduced from 12%)
​Umbrellas, including sun umbrellas ​0% (reduced from 12%)
​Sunglasses ​0% (reduced from 3%)
​Musical instruments, parts and accessories ​0% (reduced from 12%)
​Natural and cultured pearls ​4.5% (reduced from 12%)
​Artwork ​0% (reduced from 12%)
​Furniture, furnishings and domestic appliances imported by local companies ​3% (reduced from 6%)
​Textiles imported with a trade licence ​3% (reduced from 6%)


 Other import duty changes:

• Import duty discount on hybrid vehicles is extended to purely electric vehicles, with cashback increased to £750 for vehicles and £150 for motorcycles.

• Import duty on rolling tobacco increased by 20 per cent to £42 per kilo.

Other areas

• Civil service pay to increase by 2.5 per cent with effect from 1 August 2014.

• With effect from 1st July 2014, the discount scheme for early payment of rates for offices, workshops and other businesses is increased from 10 per cent to 15 per cent.

• New companies starting up business in Gibraltar will be eligible for a discount for early payments of rates of 65 per cent in the first year of trading.

• No stamp duty is payable by first and second time homebuyers on the first £250k of the cost of the property.

• Passenger tax at the airport is abolished for passengers who are joining vessels in Gibraltar.

• The statutory minimum wage increases by 11 pence to £6.11 per hour with effect from 1 August 2014. (Note that this was subsequently amended to £6.15 per hour from 1 September 2014). 

• Employee jobs of 22,907, up by 1,388 since October 2012.