Responding to a question from Deputy Montfort Tadier during yesterday’s States Assembly meeting about incentives for islanders to make behavioural changes to help the environment, Deputy Jonathan Renouf said the island had a “low, broad and simple principle with our taxation and GST fits into that”.
The Minister said it was “justified” to apply the 5% tax on green products, and pointed to various other “targeted measures” to achieve the wide-ranging changes needed to reach Jersey’s net-zero aims.
A pilot scheme converting oil-fired boilers to biofuel was being developed, he added.
This is in addition to a subsidy scheme offering up to £10,000 per household to replace oil-fired boilers.
Deputy Renouf said this scheme was a “far better use of government funds”.
There have previously been calls for GST to be scrapped on green goods.
In December 2020, the then-Treasury Minister, Susie Pinel, was tasked with analysing the effect of scrapping GST on a number of environmentally friendly goods, after States Members supported an amendment to the Government Plan proposed by Deputy Rob Ward.
Pictured: Deputy Rob Ward asked the previous Treasury Minister to investigate removing GST from eco-friendly items, such as solar panels, electric bikes, insulation and double glazing, but the idea was not supported.
However, she concluded that zero-rating the list proposed by Deputy Ward and other States Members – including solar panels, electric cars and loft insulation – wouldn’t be an effective way to encourage more environmentally friendly practices.
“[I] remain convinced that reductions in GST are not effective in encouraging the take-up of environmentally-friendly products due to Jersey’s low – 5% – rate of GST,” Deputy Pinel commented at the time.
“The incentive created by zero-rating would be too little to affect the purchasing decisions of lower-income households and a needless bonus for higher- income households which are more likely in any event to invest in such goods.
“Were the Government to incentivise take-up of such products, I may be more inclined to support any investigation of schemes which subsidised the use of environmentally-friendly goods by lower-income households while maintaining the GST rate on such goods.”
