If the States back the Tax Reform proposals this week, they’ve already agreed that the mooted 3% rate of GST might only last for two years.

An amendment lodged by Forward Guernsey members Deputy Gavin St Pier and Deputy Sally Rochester has been approved by 21 votes to 16, changing the proposals put forward by Policy and Resources which stated GST would be introduced at 3% with no commitment to any future rises.

The St Pier/Rochester amendment instead commits the States to introducing a goods and services tax at 3%, rising to 4% after 24 months, and increasing again to 5% within another 24 months.

If the States vote by a majority to introduce GST it is now intended to come in during 2029, meaning it would be expected to hit 5% during 2033.

Pictured: The Forward Guernsey political membership is (clockwise from top right) Deputies Gavin St Pier, Rhona Humpreys, Tom Rylatt, and Sally Rochester.

The increases would not happen automatically in 2031 and 2033, with the amendment committing the future P&R committee to reviewing the impact of GST on lower and middle income households.

The amendment also included assurances that if GST does rise to 4% and then 5%, it will be coupled with increases to allowances to help households with less disposable income than wealthier families.

An ‘additional earnings allowance’ will also have to be explored by the States’ economists, which Forward Guernsey says will help encourage young people to stay in the island – one of its manifesto pledges last year.

The changes were backed by 21 deputies, with 16 voting against and three choosing not to vote.

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A separate attempt by deputies Aidan Matthews and Andy Sloan to zero-rate food and non alcoholic drinks if GST is introduced, was rejected.

The vote was lost 15–24.

Locally grown or produced food “by small independent suppliers” will be zero-rated however, after deputies voted 28-11 in favour of a different amendment lodged by deputies Marc Leadbeater and Andy Cameron.

Pictured: The States are debating Tax Reform proposals this week.

The States haven’t made a final decision yet whether to back P&R’s proposals – which now include the amended GST clause that it will start at 3% and rise to 4% then 5% based on future reviews.

The majority of attempts to remove or delay the introduction of GST have so far been lost, with P&R appearing to have a majority of at least one vote behind their proposals.

When the States come to vote on the amended package it will include the new GST timeline, with rises scheduled for two years and four years post-implantation.

A vote on that is not expected before Friday afternoon at the earliest, with the debate potentially paused again if all business is not concluded by the end of the day.