The Guernsey Retail Group said many of its members were disappointed and worried for the future of their businesses after the States decided last week to adopt the tax as part of a wider package of reforms.
A survey of 65 local retailers by the group found that 62 of them, or 95.4%, had moderate or high concern about GST, with more than two-thirds highly concerned about the future viability of their businesses.
‘Now that the decision has been made, the focus must shift to protecting Guernsey’s local economy and creating the conditions in which businesses can continue to trade, invest and employ local people,’ said the group’s retail liaison officer Laura Clayton.
‘Growth and tax reform must travel together. You cannot build a stronger Treasury by weakening the economy that ultimately pays for it.’
Under Policy & Resources’ proposals, if an off-island seller does not charge GST at checkout, and the value of goods is below £280, islanders will not have to pay GST at the border before delivery.
The group wants this de minimis threshold to be urgently reconsidered, arguing that government policy should not add to the disadvantage faced by local businesses that employ islanders and invest locally.
The group said retailers were already facing rising employment and property costs, freight pressures, recruitment difficulties, fragile consumer demand and intense competition from online and off-island operators.
It pointed out that the proposals acknowledged GST was likely to push up prices, add to inflation, reduce disposable income and change spending habits.
Survey respondents also raised the cost of changing accounting and point-of-sale systems, extra administration, and pressure to either raise prices or accept lower margins.
However, GRG director Malcolm Woodhams welcomed the commitment to economic growth in the 2027 Budget.
‘The planned £15m. investment over the next three years is a start and we are keen to hear more details about how it will be spent,’ he said.
Mr Woodhams said the group looked forward to working with the States to ensure some of that investment benefitted on-island retail, ‘which in turn will benefit the island’s wider economy’.
Retail employs more than 3,500 people in Guernsey and helps sustain St Peter Port, the Bridge and parish centres.
‘The real question is no longer whether Guernsey will have GST,’ said Mr Woodhams. ‘It is whether we use this moment to build a stronger and more competitive local economy alongside it.’
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