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Food will not be exempt from GST in Guernsey

Deputies have voted through the concept of GST at 5% on food shopping - but were reminded the final vote is not until the summer.

The choice was to either introduce a blanket GST of 5% on everything, or 6% on other taxable items including meals out.

Three amendments to the Policy Letter all failed.

Deputy Jayne Ozanne wanted to cease debate until more financial information was available but that was lost.

Deputy Liam McKenna's bid to remove GST from this term's political also failed, as did a bid to discount a territorial tax from further investigation.

A lengthy debate saw many politicians voice anti-GST sentiments:

"A food exemption will increase the rate, complicate the system and solve a problem that has already been addressed elsewhere in the package."

"The strength of GST Plus lies in its simplicity, a low, broadbased rate, with fairness achieved through the icome tax system and social security arrangements."

"The basket of foods for a working-age couple would cost around 7.5% more in Alderney."

"Food is an essential for life, government should not be getting in the way and charging a fee for something that is needed."

"Applying GST to food is simply, morally wrong!"

"I will not support this in any way, shape or form. Don't come back here, punishing the poorest on food staples and giving exemptions to the colleges."

"I fear most of all that the vulnerable amongst us will get hit the hardest, please do not support this."

The sharpest response came from Deputy Andy Sloan, who warned the Assembly that they were effectively voting to accept GST at 5% now.

Policy and Resources repeated that this is not the case and the vote only paves the way for its possible introduction, with a final decision to be made in the summer.

Close to 5.30pm, Deputy Gavin St Pier began to sum up and despite a technical glitch, the vote to accept GST at 5% - including on food shopping - was won by a majority of 24 to 12. 

Deputies also agreed to a range of mitigation measures, including a lower rate of income tax and benefits for the less well off.

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