Tag: What’s the view in Jersey

Guernsey has voted to introduce a Goods and Services Tax (GST) after States members voted against an increase in income tax. BBC News has been to speak to islanders in Jersey, where they have had a version of GST for 16 years, about their experiences and views on the tax.

"Everything goes up, up, up all the time," 90 year-old Gwen Civi said.

"We've just had decoration done at home and the amount of GST we paid on that was horrific. It does make things much more expensive."

When GST was introduced in 2008 it was added to most things imported to the island at 3% in response to the government receiving less tax from the finance industry.

At the time critics called for food, children's clothes and school books to be excluded.

Since 2010 GST has been set at 5% and in 2022 politicians rejected proposals to make food exempt to reduce the cost of living.

"I’d rather not have it, ideally, but it’s been around for a while now so I’m probably used to it. 5% I think people can live with", Mark Le Brocq said.

The 45-year-old believes Guernsey may lose out on some business from Jersey residents who currently can shop there for certain cheaper products.

"I’ve got a boat so I could potentially go over to Guernsey…if I was going to buy something expensive, I’d take the boat over there, buy it over there. I think [having GST in Guernsey] it would affect visitors", he said.

"I don’t like it but I was surprised Guernsey said they’re going to introduce it."

Jenny Burden, 69, said rising prices have created a real challenge, and GST has been a part of that, alongside high rates of inflation in recent years.

"GST makes everything so expensive on the essentials; food, electricity. It gets put on everything, the telephone and everything", she said.

"We just shop for the cheapest food we can buy and we have no choice on the electric, we’ve only got one supplier.

"It’s harder on the lower income people and the pensioners because your pension doesn’t cover all of your expenses and you have to rely on family if you want any extras.

Ms Burden said GST had "made life very much harder" and she notices the difference it makes to her personal budget "when you add it up over a month".

Fiona Shilliday said applying GST to food has meant nobody can escape paying it.

She said: "At the time it was introduced because it was replicating VAT as an added tax.

"I understood when it came in at a small amount that that wasn’t going to last... I [can] choose to buy something that has GST added, but I can’t not buy food.

"If it was even reduced on food only, then that would be a great benefit, not just to me but to everyone else on the island."

Jersey's treasury minister has defended the decision to charge GST on almost everything since it was introduced.

Deputy Elaine Millar said: "Our approach has been low, broad, simple and fair".

"The simplicity involved in charging everything makes it easy to administer and easy to understand.

"If we hadn't introduced GST, we may have had to do something else."

She added Guernsey may need to think about how the government is going to support families on low incomes when the change comes in.

"We introduced, I think, at that point, a forerunner to reflect the fact that it would have a greater impact on people on low earnings.

"We introduced the Community Cost Bonus, which is still alive and well, and is still being paid out to low income families to help them with elements like GST."

While ordinary islanders feel the squeeze, a higher tax rate of 15% was introduced in September 2024 for larger companies.

It aims to stop organisations leaving the Channel Islands for jurisdictions with no or lower tax thresholds.

The majority of businesses will continue to trade under the zero-ten rule which sets the standard rate of company tax at 0% while finance firms pay 10%.

In Guernsey plans to introduce GST were twice rejected in 2023 and the government was told that without an increase in income tax, public projects including extending the hospital and building more houses, could be cut.