Guernsey Press

‘Businesses won’t be able to absorb 5% GST’

LOCAL businesses fear the repercussions that could arise if a goods and services tax is implemented in Guernsey.

Dan Ogier from Arcadia on the Bridge has said businesses probably would not be able to absorb 5% in goods and services tax and would have to pass it on to customers at a time of soaring inflation. (Picture by Luke Le Prevost, 31674913)

Some shops and businesses across the island have anti-GST merchandise on display.

RH Gaudion & Sons managing director Martyn Gaudion has displayed anti-GST posters in the windows of the stores at Camp Du Roi.

‘The States needs to address their own problems with overspending and hold accountability in their departments first,’ said Mr Gaudion.

‘The hole needs to be filled somehow, but sales tax is not the fairest way.’

Mr Gaudion’s concerns about GST include politicians raising the GST figure every few years, and local businesses having a disadvantage against internet dealers.

‘Internet sales will need to be set very low for it to be an even playing field for local businesses,’ he said.

‘There are costs for removing cardboard and packaging, staffing and for those who rent shops or properties which online businesses do not have, so there are also smaller issues that build up.’

Employees at Arcadia have been wearing anti-GST pin badges, and said it was something they were concerned about and discussing for several months.

Technician Dan Ogier has previously handed out anti-GST posters on the Bridge.

‘With the cost of living going up around us and secondary pensions coming in, that’s another expense for the employer and the employee,’ he said.

‘Even people that are under the £300,000 cap [de minimus level for businesses], they say it won’t affect these people, but it will because everyone around them will be getting charged GST, so if you buy from them as a supplier, you’ll get it.

'He said that people already price compare with online businesses and GST would further fuel that problem.

‘Businesses probably won’t be able to absorb 5% and will have to add it on the price and there is already soaring inflation.’

Deputy Peter Roffey who is one of the politicians leading the initial plans said that if approved, the new tax system will take money out of the economy, but could offset funds for lower income households.

‘However, low- to middle-income earners will be slightly better off because the reduction in their social security payments will, in most cases, outweigh the extra money they spend through GST. So they should have a little more money to spend,’ he said.

For retail-heavy areas such as the Bridge, this could be seen as beneficial, but despite the drop-ins, meetings, Q&A sessions, leaflet drop and Tax Review website, some half-a-dozen businesses on the Bridge last month told the Guernsey Press that they did not feel informed enough on GST to be able to comment their thoughts or concerns.