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Guernsey throws out GST as it adopts "do little" approach to tax

Guernsey throws out GST as it adopts

Saturday 18 February 2023

Guernsey throws out GST as it adopts "do little" approach to tax

Saturday 18 February 2023

Guernsey politicians have thrown out the concept of introducing GST after six days of dramatic debate over the future of the island's tax system.

The island's Treasury lead, Deputy Mark Helyar, had warned that a "tragic and destructive thing" was about to happen to the island's economy, and that GST was the only credible alternative capable of doing the heavy lifting.

The proposal had sparked significant protests across Guernsey, with thousands of islanders taking to the streets and voicing their concerns directly outside the island's States Chamber ahead of the debate.

However, Deputy Helyar argued that it was a broad, easy to collect, simple to administer tax, adding that other elements of his proposed 'Option A' package would have meant a reduction in taxation for Guernsey households of about 60%.

Video: Highlights from Guernsey's first anti-GST rally which saw thousands protest.

Even if the proposal had been supported, the GST would not have applied to food, as a result of a successful amendment by Deputy John Gollop.

However, the package suggested by his Committee - the island's leading Policy and Resources team - was out-voted by just 15 votes to 25.

The leading opposition tax package was known as 'Option D' and was spearheaded by former Deputy Chief Minister and Health President under Gavin St. Pier, Heidi Soulsby.

Option D called for social security reforms, higher personal allowances, lower personal income tax allowance withdrawal, a register fee for Open Market properties, a reformed tax cap for high earners, levies on corporates with an aim of raising £10m, savings of £8m, and review of Guernsey's capital project portfolio.


Pictured: Deputy Heidi Soulsby, who put forward the 'Option D' approach.

20 of Guernsey's States Members voted in favour and 20 against, meaning that the status quo prevailed.

While the lengthy landmark debate did not result in any significant reforms to the island's tax system, politicians did back some public sector spending-related work as a result, including:

  • reviewing the island's capital projects portfolio;

  • reviewing essential community services to see if any can be cut, outsourced, or commissioned to save money;

  • reviewing public sector pensions, and staff terms and conditions, for new entrants;

  • forcing Policy and Resources to provide an estimate of the structural deficit in future budgets;

  • the creation of a group to investigate other changes to the tax system;

  • finding ways to generate additional revenue from transport, parking and licensing;

  • finding ways to raise an extra £2m pounds per year from the visitor economy;

  • encouraging those who claim benefits to find jobs; and

  • agreeing a long-term vision for the island before the end of 2024.


FOCUS: The tax options on the table for Guernsey - and how States Members voted

Head to Bailiwick Express Guernsey for even more analysis...


Jersey's former Chief Minister, Frank Walker, previously told Bailiwick Podcasts why he has "no regrets" about introducing GST. Listen below to the interview or search 'Bailiwick Podcasts' with your favourite podcast provider...

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Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.

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Posted by Martin on
Can Jersey throw out Zero Ten & GST! One may balance out the other?

Even with the extra cash we seem to be treading water WHAT is Guernsey doing right that we are not?
Posted by IanSmith97 on
This decision, or should I say non decision, will cost the public of Guernsey dear. More emotion than fact in the whole debate I think.
Posted by on
Well done Guernsey,

You only have to look at the dangers of increased tax flow in Jersey with no regulation of how it is spent.

The more money the states have, the more they will spend on stupid projects and waste money instead of accounting where every penny is spent.

If government spends less, the people keep more money in their pockets to spend on what they want instead of paying it out in taxes.
Posted by Scott Mills on
Wow a government who listened to the people who put them in the chair to make these decision. Meanwhile in Cartel grows on trees in every politicians garden. Lovely beaches
Posted by John Henwood on
As a Jerseyman it gives me no pleasure to witness Guernsey pressing the economic self-destruct button. Deputy Soulsby's 'do nothing' option will lead to Guernsey either going broke or getting into debts that it can't afford to redeem. There are two very stark alternatives, increase taxes or cut spending (or both). It shouldn't be forgotten that Deputy Soulsby got the Covid strategy wrong and now she's made another big mistake. It's no good denying every option, Deputy Soulsby, you have to come up with a sensible alternative proposal.
Posted by IanSmith97 on
Guernsey is not doing something ‘right’. They are in severe, really severe financial trouble. Wait until the services are cut because there is no money to pay for them. Then the squealing will start. Services have to be paid for - health, education, police, roads, infrastructure, social security, pensions. If you want no services then don’t raise revenue. You can’t have one without the other. This is a pyrrhic victory for the GST opponents. I’m not crazy about GST but am a realist.
Posted by Keith Marsh on
The problem is, IF you don't get income from extra taxation, services cannot be paid for by the State. Those in our sister island will find themselves putting their hands in their pockets to pay for things that were free.
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