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Guernsey 5% GST implementation proposal fails

Third attempt at introduction of Goods and Services Tax fails

The Channel Island of Guernsey’s Policy and Resources Committee (PRC) has failed again on its planned introduction of a 5% Goods & Services tax. This was the third attempt.

Aside from GST, the PRC is proposing two alternatives to GST: spending cuts; or Income Tax increase by 3%.

The tax plan came as the island faces a national deficit of £100 million this year. There are also plans to borrow £350 million, which combined with the launch of GST, is aimed at helping the less well-off in the community. The indirect tax 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 eventually 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.

The neighbouring island state of Jersey introduced GST in 2008. This was originally at 3%, but was raised to the current 5% in June 2011.

Currently, 175 countries have implemented VAT.

Jan 2023: Parliament stalls on GST launch

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.

Feb 2022: 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.

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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