Deputies vote to include food when GST introduced
BBCDeputies have voted to include food when a goods and service tax (GST) is introduced in Guernsey, with 24 States members supporting the proposal.
But a move to halt work on the introduction of the tax has been defeated with five politicians voting for and 31 against.
Deputies Liam McKenna and Simon Vermeulen, who put forward the amendment, asked States members to stick to the promises they made at the election last year and vote to scrap plans for a GST.
Those who opposed the amendment argued now was not the time to decide to stop work on GST, and that decision should come later this year when a review of corporate tax has been completed.
Deputies voted in favour of the preferred Policy and Resources' (P&R) option to include food in a 5% (GST).
A number of deputies, who previously supported tax reform, have said they are reluctant to back GST unless the States shows a commitment to making savings.
Proposals from deputies Haley Camp and Mark Helyar to stop all work on territorial corporate income tax were also defeated, after a 13-23 vote.
A 5% GST, alongside a 15% rate of income tax for earnings under £32,400, reforms to social security contributions and higher income tax allowances, were agreed in 2024.
Reform debate
Officials say this package, set to be introduced in 2028, will bring in around £50m a year, and mean lower and middle-earners have more money to take home each month.
The cost per year of collecting a GST has been estimated around £1m, with Policy and Resources stating the cost of setting up the system will cost around £2.4m.
A debate on tax reform is set for later this year, following a review of the island's corporate tax system, which is being led by Deputy Charles Parkinson.
It could see the States throw out plans to introduce a GST in 2028, increase the tax taken locally from companies, or vote for a package of smaller taxes to attempt to fill the deficit.
Follow BBC Guernsey on X and Facebook and Instagram. Send your story ideas to channel.islands@bbc.co.uk.
