Removing the island's goods and services tax (GST) from food would incur an annual cost of approximately £14.4 million for the states, according to Treasury Minister Alan McLean. In response to a written question from Deputy Lee Carpenter, McLean stated that an assessment indicated such a removal would primarily benefit the wealthiest residents, as they tend to spend more on groceries.
The assessment found that while the lowest household income earners would see a 12% annual saving from removing GST on essential grocery items, the highest household earners would save 28%. McLean highlighted that when GST was initially implemented, the states agreed to offset its impact through adjustments to personal tax allowances, increases in income support payments, and targeted community cost bonuses.
He maintained that a broad-based GST, combined with these existing support measures, represents the most effective strategy for assisting residents with the cost of GST on food. On Monday, residents in Guernsey protested a proposed 3% GST, which is scheduled for debate this week and, if approved, is slated for introduction in 2028.