The Policy & Finance Committee has published a short update for islanders to explain how it is looking for a ‘pragmatic solution’ following last week’s vote in favour in the States of Guernsey.
It said it was ‘encouraged’ with the progress so far.
‘The cost of living in Sark is already high, and residents are rightly concerned about the potential impact this may have on prices and everyday expenses,’ it said in a statement.
‘Over the past few years conseillers have had preliminary discussions with Guernsey counterparts and officers regarding the potential implications of GST for Sark.
‘While this is perhaps not a tax that Sark might have chosen, we have been very encouraged that Guernsey has listened carefully to the concerns raised regarding Sark’s already high cost of living and the potential effect on island households and businesses.’
It said that the early discussions have included some bespoke measures for Sark that could help reduce the impact, for example, ensuring GST is zero-rated from essential wholesalers of food and fuel, but Chief Pleas said it was aware that GST would inevitably have some effect on Sark, as most goods arriving in the island will pass through or are purchased from Guernsey.
‘There is no solution that entirely removes the impact, be that a formal goods border between our islands or additional costs that may be incurred when shopping in Guernsey.
‘Our priority is therefore to ensure that any arrangements minimise this impact for residents and businesses. We have been clear throughout that the movement of people and goods between Sark and Guernsey must remain as frictionless as possible, and we will continue to make that case strongly on Sark’s behalf.’
It said that the States had ‘confirmed’ that Sark could receive a rebate payment to offset the GST paid by Sark residents and businesses on goods and services purchased through Guernsey, which could in turn be used to offset rises in basic tax rates in Sark.
‘There is still much work to be done before any final arrangements can be agreed and any proposals affecting Sark will ultimately require debate and approval at Chief Pleas,’ P&F added.
‘We are committed to reaching the pragmatic solution for Sark residents throughout this process and our objective throughout will be to minimise the impact on islanders and secure the best possible outcome for Sark.’
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