Record £533m tax receipts show compliance reforms are working, Feetham says 

The Minister for Justice, Trade and Industry, Nigel Feetham, said Gibraltar’s record tax receipts showed that efforts to strengthen compliance and ensure businesses met their obligations were delivering results, as he delivered his Budget address in Parliament. 

Total tax receipts for the 2025/2026 financial year amounted to £533 million, comprising £281 million in personal income tax and £252 million in corporate tax. 

Mr Feetham said the figures represented the highest level of tax revenue collected in Gibraltar’s history and marked the second consecutive year of record receipts. 

He said the increase was partly linked to the rise in Gibraltar’s corporate tax rate from 12.5% to the globally recognised minimum rate of 15% but added that the larger factor was stronger compliance and administration. 

“The greater part of the story lies elsewhere,” Mr Feetham told Parliament. 

“It lies in stronger compliance, more effective administration and the success of our efforts to ensure that big businesses generating significant profits from Gibraltar contribute fairly and lawfully to the public purse.” 

Corporate tax receipts increased by 19% compared with the previous financial year and by more than 50% over the two financial years since 2023/2024, he said. 

Mr Feetham said the figures reflected the impact of Gibraltar’s National Tax Strategy, which he began implementing shortly after taking ministerial office. 

“Gibraltar has never before recorded corporate tax revenues at anything approaching these levels,” he said. 

He said the strategy had been introduced in response to concerns over growing reported tax losses. 

“Large reported tax losses were growing at an alarming rate and there was also a growing concern that some big businesses viewed their tax obligations as voluntary rather than as a legal responsibility,” he said. 

The Government had responded by introducing legislative reforms, increasing compliance activity and investing in additional expertise within the Income Tax Office, he said. 

Mr Feetham said the focus had been on reducing the gap between the tax legally due and the tax collected. 

“Tax policy is not just about corporate tax rates, but about the extent to which tax obligations are properly met and fairly enforced,” he said. 

He added that the increased revenues had not come from raising the tax burden on ordinary workers, but from ensuring existing obligations were fulfilled. 

PRISON REFORMS 

In his justice portfolio, Mr Feetham said the Government had brought forward legislation aimed at increasing the time some offenders convicted of serious sexual offences would spend in prison before becoming eligible for release on licence. 

The Prison (Amendment) Bill 2026 provides that offenders aged 18 or over at the time of the offence, convicted of specified sexual offences and sentenced to more than 12 months’ imprisonment, would be required to serve at least three-quarters of their sentence before they could be considered for release on licence. 

Mr Feetham stressed that eligibility for consideration did not mean automatic release. 

“The Parole Board must be satisfied that continued detention is no longer necessary for the protection of the public and that the risk of reoffending is minimal,” he said. 

He said the legislation followed consultation with a range of organisations, including the judiciary, the UK Ministry of Justice, the Director of Public Prosecutions, the Royal Gibraltar Police, HM Prison senior management and the Parole Board. 

Mr Feetham said changes had been made following that engagement, including reviews of the offences covered, parole thresholds and operational consequences. 

The Government will also introduce amendments to increase the maximum penalty for possession of indecent photographs or pseudo-photographs of children from five years’ imprisonment to seven years. 

Mr Feetham said the increase represented a 40% rise and reflected the seriousness of such offences. 

“Possession of indecent images of children is not passive offending,” he said. 

“It is not victimless offending.” 

He added that the possession and circulation of such material contributed to wider harm and sustained demand for child sexual abuse material. 

MONEYVAL AND FATF 

Mr Feetham also updated Parliament on Gibraltar’s preparations for the next MONEYVAL and FATF evaluation cycle in 2027. 

He said work had intensified ahead of what would be a rigorous assessment under revised FATF standards. 

Mr Feetham said the involvement of Gibraltarian professionals and public officials in international assessment processes demonstrated the growing expertise and credibility of Gibraltar’s institutions in tackling money laundering and terrorist financing. 

He highlighted the operationalisation of Gibraltar’s Unexplained Wealth Orders regime under the Proceeds of Crime Act 2015 as one of the key developments over the past year. 

The Government had also published a Code of Practice on Unexplained Wealth Orders and Interim Freezing Orders, providing guidance to enforcement authorities, courts and legal practitioners on the use of those powers. 

Mr Feetham said Gibraltar had continued to strengthen its framework in areas including sanctions, proceeds of crime, information sharing, beneficial ownership transparency and investigatory powers. 

He also pointed to the publication of the 2025 National Risk Assessment, which examined evolving money laundering, terrorist financing and proliferation financing risks. 

INVESTMENT IN POLICE 

Mr Feetham said investment in policing would continue, with approval given for an additional 32 police officer posts for the 2026/2027 policing year. 

The increase would take the establishment of warranted officers from 258 to 290, representing a 12% rise. 

Recruitment was expected to take place during the second half of 2026, allowing the Royal Gibraltar Police to provide enhanced policing at the land border with Spain and Gibraltar International Airport in the context of the Treaty. 

This would be in addition to recruitment to fill the current 20 vacancies within the RGP, with a new recruit school due to begin in November 2026. 

The Government had also invested in 13 police staff posts, which Mr Feetham said would allow police officers currently carrying out administrative roles to return to frontline duties. 

He said increased capital funding would support improvements including refurbishment works at New Mole House, replacement of the existing records management database, new police vehicles and maritime equipment.