If Guernsey introduces a goods and services tax it will be at 5% including on food.
Deputies have agreed the detail around the proposed new tax, ahead of a debate this summer that should confirm once and for all if it is being introduced.
If it does come in, we could be paying 5% for all goods and services, bar a few named essentials, by 2028.
The GST+ package has been confirmed as including a lower rate income tax, at 15% for lower earners, with higher personal allowances, to offset the 5% tax.
Deputies also agreed that supplies sold by charities will be exempt from GST, and that charities themselves will be able to claim back the GST they have to pay on any goods or services they buy in.
A number of other exemptions were agreed yesterday, including a pledge not to charge GST on doctor appointments, emergency hospital visits, ambulance usage, and pharmaceutical supplies.
Dentists and opticians will also be exempt from charging their patients a goods and services tax if it is introduced, along with childcare provision for pre-school age children, burials and cremations and other unavoidable costs that many people face.
Public services that the States provide for free, and domestic banking and insurance services are also to be exempt from GST.
This week’s States debate also paved the pay for future GST increases to be subject to a ‘super majority’. That means two-thirds of the States’ would have to agree to any rises above 5% in the future, if GST+ is adopted.
The decision to put GST on food was approved by a 24-12 majority.
The States are expected to vote on the introduction of GST+ in June. If it is approved then, the goods and services tax and the changes to income tax and social security allowances will come in during 2028.
