Guernsey States rejects proposals to introduce GST

Proposals to introduce a Goods and Service Tax (GST) have been rejected by Guernsey's States.

Policy and Resource's (P&R) plans for a 5% GST alongside higher income tax allowances were rejected by 25 votes to 15.

Deputies approved a number of investigations into taxes on motoring and visitors.

P&R President Peter Ferbrache said the "people of Guernsey have been let down."

Policy and resources member deputy David Mahoney said he had voted for Option A "despite knowing it will make me worse off, as I accept people like me should be shouldering a large part of the burden".

Option A centred on a 5% GST raising more than £68m, with higher income tax allowances, a new income tax band of 15% on earnings under £30,000, and a reform of social security contributions.

President of economic development Deputy Neil Inder had agreed A was the best option.

He said: "I genuinely believe Option A is probably a fair and practical way of delivering sustainable finances."

Deputy Andy Taylor had backed Option D, proposed by deputies Heidi Soulsby and Gavin St Pier.

"The cut and thrust of the issue is, option A is not deliverable before the June 2025 General Election, I don't think this P&R could deliver it before the next election," he said.

"Option A is not deliverable and Option D clearly is."

Option D included £4m worth of budget cuts, higher income tax allowances, higher property taxes, social security reform, a review of capital spending and a review of corporate tax.

Deputies Carl Meerveld and David De Lisle had explained why they believed Option C - £31m worth of budget cuts - was the best solution.

Mr Meerveld said he would be willing to serve on a committee with Policy and Resources to identify where cuts to States finances could be made.

Correction Friday, 17 February, 2023: An earlier version of this story said the States had failed to make a decision on whether to introduce GST. It has been amended as the States had rejected the proposals.

Follow BBC Guernsey on Twitter and Facebook. Send your story ideas to [email protected].