The Guernsey Retail Group has warned that more needs to be done to protect local shops ahead of GST coming in.
Following the States decision on Friday to approve the Tax Reform proposals, a 3% goods and services tax could be levied on nearly everything from 2029 onwards.
The GRG said it is now focused on “working constructively with government to minimise its impact, address the competitive imbalance faced by local businesses, and ensure that tax reform is accompanied by a credible plan for economic growth”.
This must include urgent reconsideration of the £280 de minimis threshold for goods purchased from off-island retailers, said Retail Liaison Officer, Laura Clayton.
“Now that the decision has been made, the focus must shift to protecting Guernsey’s local economy and creating the conditions in which businesses can continue to trade, invest, and employ local people,” she said.
“Growth and tax reform must travel together. If government is asking businesses and consumers to carry more of the fiscal burden, it must also create the conditions that allow those businesses to grow. You cannot build a stronger Treasury by weakening the economy that ultimately pays for it.”
The GRG said P&R’s plans acknowledges that GST is likely to increase prices, add inflationary pressure, reduce disposable income, and change spending behaviour. It also notes sector concerns regarding food, eCommerce, and smaller-business compliance burdens.
Recent surveys conducted by the Guernsey Retail Group indicated the level of concern amongst retailers, with data collated this summer providing a serious warning about the potential effect of introducing an additional challenge at a time when businesses are already facing rising employment and property costs, freight pressures, recruitment difficulties, fragile consumer demand, and intense competition from off-island/online operators, added GRG Director Malcolm Woodhams.
95.4% of respondents said they have ‘moderate’ or ‘high levels of concern’ over the introduction of a goods and services tax
Guernsey retail group
“The real question is no longer whether Guernsey will have GST,” said Mr Woodhams.
“It is whether we use this moment to build a stronger and more competitive local economy alongside it. If local businesses thrive, Guernsey thrives.”
Following the publication of the 2027 Budget on Tuesday morning, Mr Woodhams said he was pleased that the States will be looking at growing the economy over the coming years – which is a message the GRG has consistently pushed ahead of introducing new taxes.
“The GRG welcomes the commitment to economic growth made in the 2027 Budget,” he said.
“The planned £15m investment over the next three years is a start and we are keen to hear more details about how it will be spent.
“The GRG looks forward to working with the States to ensure some of the investment will benefit the on-island retail sector, which it turn will benefit the island’s wider economy.”
