GST heading your way for 2027
A goods and services tax is on the way in Guernsey and Alderney.
From 2027 islanders will be paying an extra 5% on almost everything they buy, the States agreed late today.
Though those behind the move, effectively engineering GST through the back door while the Policy & Resources Committee’s bid to put income tax up by 2p in the pound was heavily defeated, said the impact, combined with radical reform of the social security system, would mean a better deal for nearly three out of four lower-earning households.
‘I’m pleased that the States has finally got around to this,’ said Peter Roffey, who pushed ‘GST-plus’ in response to the income tax proposal.
Listen to reaction and analysis to Friday’s vote on our Shorthand States podcast
'I don’t want to be too triumphant – it’s a new tax after all. But the penny has finally dropped that this will help people on more modest incomes. It’s not just about GST, it’s about all sorts of other measures to help the less well-off.’
Faced with an ever-rising structural deficit in public finances, deputies approved the move by 20 votes to 15. The States will also now have to consider whether or not to impose GST on food, or exempt it and raise the headline tax rate to 6%.
P&R president Lyndon Trott, who saw his proposal for 2p on income tax defeated by 24 votes to 10, said he would look to pick up the pieces.
‘Democracy has prevailed, even if I think we’ve made the wrong decision.
But leaders pick up the pieces and see what they can work with.’
He said he was shocked that the States had also voted through an unfunded Budget of £650m. for 2025.
‘It will be infrastructure that suffers and that’s a great shame.’
Read more in this weekend’s Guernsey Press.
