Guernsey politicians to debate GST for fourth time to replace 2% income tax increase

Guernsey politicians have proposed introducing a 5% goods and services tax to the island instead of an income tax increase.

Deputy Peter Roffey is bringing forward the amendment for Guernsey's 2025 Budget to introduce GST to the island, replacing the planned 2% increase in income tax.

Proposals would instead include a new 15% tax band for earnings up to £30,000, meaning income tax will drop by £900 for most people.

It's the fourth time GST has been debated this political term, having been voted down three times before.

It is understood that Deputy Peter Ferbrache will be seconding the motion.

Deputy Roffey says GST is more attractive than an income tax, with this fourth attempt more likely to pass as the States of Guernsey must effectively choose between introducing GST or increasing income tax.

In the current 2025 Budget plans, a family with two children on average household income would pay approximately £1,140 more in taxes across the year or about £22 a week.

However, some residents have taken to social media to voice their concerns.

One commenter says: "We are in a big problem [...] take some action now for a short 2-year period.

"Just pass this budget, get it set up to start January 2025, and work from there. All this talk and bringing up GST now for further debate is stupid."

Another adds: "I don’t think GST stands a chance because of the terrible job of selling it this term [...] I honestly think different personalities could have sold GST better and the mitigations that could have had lower earners better off."

One more says "Is anyone else sick of fighting the same battles again and again? It's our money - shouldn't we have some say at least into whether we're going to be allowed a decent life?"

There were some shows of support with one resident explaining: "GST is the fairest way. This way everyone pays. The more you spend, the more you contribute."

No, it’s not 'Groundhog Day', even though it might seem like it. GST is back on the table… again, and it’s posed an alternative to income tax rises... again.

This is the fourth time this term that a goods and services tax has been brought to the table and the second time Deputy Lyndon Trott has tried to get a 2p on the pound increase in income tax through the States.

Last year, it was Deputy Peter Ferbrache’s version of P&R that proposed a 5% GST and its failure to gain support saw him ousted as Chief Minister and replaced by Deputy Trott.

Now it’s Deputy Peter Roffey, supported by Deputy Ferbrache, who is pitching the same 5% GST from 2027.

The two options are coming from increasingly desperate States, who are struggling to tackle a deficit by the end of this year of £24 million.

A temporary income tax increase will raise roughly £56 million over the next two years, and introducing GST could bring in £50 million a year permanently.

It’s widely understood that Guernsey must generate more income to protect against changing demographics and increasing healthcare costs. The island simply doesn’t have enough money and the two biggest levers available are GST and income tax.

The problem is that both are big decisions, and this Assembly has struggled with making any of those.

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