Guernsey Press

Time for business to have its say

BACK in 2014, one of the occasions in recent years when a goods and services tax has been thrust into the spotlight, the island’s business organisations were so concerned they commissioned a professor from Henley Business School at the University of Reading to produce a report.


The Guernsey International Business Association, Chamber of Commerce and the Confederation of Guernsey Industry seized on it to fight against what they saw as a ‘lethal legacy for growth’.

Some of the arguments raised almost eight years ago now are still being heard today. And many of the issues raised in Professor Dominic Swords’ executive summary are worth repeating.

He highlighted the negative impact of a GST on key sectors including retail, travel, tourism and hospitality.

Claimed that a GST would harm prospects for diversifying the economy.

Argued that a GST would have a disproportionate and negative effect on growth and innovation, and be particularly expensive and inefficient to operate on the islands as it would place a large administrative and compliance cost on our important small and micro businesses.

And while measures to offset the impact on those of lower incomes could work, Professor Swords was worried about the extra complexity and costs this would introduce into the tax system, which would, he said, distort the employment market and damage the island’s reputation for low and simple tax.

He summarised that GST would ‘pose major risks for the future prosperity of the islands’ and said that a more thorough reassessment of the ‘future vision for public services locally’ should be at the centre of the task of solving the fiscal challenge.

The arguments put forward by the business community at that time were strident but unsurprising. Government was being unsophisticated in its approach, and a review of spending was required first.

In eight years nothing much has changed on all these fronts, but the business organisations are yet to really show their hand in the tax review debate.

There is scope for business to have a say in this debate beyond corporate tax rates – and revisiting the Swords report seems a reasonable place to start.