Removing GST from Food Could Cost £14.4m Annually, Minister Says

Treasury minister Senator Alan McLean states removing GST from food would cost £14.4m annually and mainly benefit wealthier islanders, with support measures in place to assist lower-income households. Protests in Guernsey precede a GST debate scheduled this week.

Cost and Impact of Removing GST on Food

The removal of the island's goods and services tax (GST) from food items would cost the states £14.4 million per year, according to treasury minister Senator Alan McLean.

Responding to a written question from Deputy Lee Carpenter, Senator McLean explained that eliminating GST on essential grocery items in shops would primarily benefit the wealthiest islanders, as they tend to spend more.

An assessment indicated that households with the lowest income would save approximately 12% annually, whereas those with the highest income would save around 28%.

Government's Position on GST and Support Measures

Senator McLean noted that when GST was introduced, the states agreed to compensate islanders through various measures including increasing personal tax allowances, raising income support payments, and providing targeted assistance via the community costs bonus.

"Ministers maintain that a broad-based GST, accompanied with these support measures, is the most effective way to support people with the cost of GST on food," he said.

Public Response and Upcoming Debate

On Monday, residents in Guernsey protested against a proposed 3% GST rate, which is scheduled for debate this week. If approved, the new GST rate would be introduced starting in 2028.