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Guernsey 5% GST decision

Guernsey to decide on implementation of Goods & Services Tax

The Channel Island of Guernsey is considering implementing a Goods and Services Tax. There is a debate on the introduction of GST  in the States of Guernsey, the parliament, on 23 January 2023.

A Policy & Resources Committee tax review has concluded introducing a broad-based GST at a rate of 5% was the preferred way to raise most of the revenue needed to put the island’s finances on a sustainable footing. According to the review, the introduction of the new tax band would “partially offset” the higher prices caused by the GST for low and middle-income households.

Currently, 171 countries have implemented VAT.

Ageing population forces GST imposition; politician rebel

This would help fill an gaping deficit as the working population shrinks and the social security costs of an ageing population mount. However, local politicians continue to resist the introduction of a consumption tax.

The likely rate will be 5%, with some measures to soften the impact for the less well off. The recommendation was published by the Policy & Resources Committee for debate with the alternative of a 3% Health Levy.

Guernsey follows Jersey’s GST lead

This will follow the other major island in the regime, Jersey, which introduced GST in 2008. This was originally at 3%, but was raised to the current 5% in June 2011.

You can keep up-to-date with VAT Calc’s global live VAT invoice transaction and e-invoice blog on country real-time reporting reforms.

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