Forward Guernsey want to set a pathway to 5% GST

Guernsey's only registered political party may look to increase the rate of GST from 3% to 5%, after it is introduced in 2028.

Forward Guernsey is putting together proposals that it said would deliver "broader tax reform", to give incentives to young people to stay on island.

Deputies are due to debate proposals from Policy and Resources (P&R) to introduce a 3% GST, reduce income tax rates, increase tax allowances, reform social security contributions, re-introduce motor tax and tax companies more.

Party leader Gavin St Pier said he wanted to provide a "pathway" to see the rate increase in the future to allow the tax system to properly be reformed and provide benefits to islanders.

Deputies have speculated there could be as many as 42 amendments when GST is debated at the States meeting starting on 30 September.

It has led to concerns from some officials that if the proposals are not approved at this States meeting, the implementation may slip later in 2028 and closer to the 2029 general election.

In response to this Deputy Gavin St Pier said his party was considering consolidating its existing amendments into one proposal.

"After years of debate and delay, we cannot afford for this issue to roll on indefinitely without resolution," he said.

"We think that to emerge with no decisions would be the worst of all worlds and highly irresponsible."

Technically the deadline for amendments is 22 September, although the States can suspend the rules to debate proposals if they are submitted late.

Eight proposals are set to come from Deputy David Goy, who is backing plans to tax underused buildings, changes to document duty and new taxes on high-net worth individuals, to avoid the introduction of a GST.

He also wants to see restrictions on the employment of consultants and high-earning civil servants.

Proposals from Deputy Andy Sloan could remove some of the mitigations if the package is approved.

Deputy Marc Leadbeater also confirmed he would be lodging a new proposal to wait a year whilst gathering evidence on the returns from pillar two corporate taxes and monitoring the performance of the revenue service, before making a decision on GST.

If States members run out of time during this States meeting, the next sitting is at the end of October.

Some anti-GST deputies were accused of filibustering during the last debate, something they denied.

In 2024 Guernsey's States approved plans for a 5% GST with similar mitigations to P&R's current package.

P&R has said if its package is defeated then the default position would not be introducing the previously approved plans.

Deputy St Pier said if the current proposals from P&R were approved a pathway to 5% would need to be set out.

"I think everybody recognises that if GST comes in, the reality is it will end up at 5%.

"Clearly that's what's happened in our cousin to the south in Jersey and it's only a question of time."

He admitted this would not be popular, but believed to get the benefits of any tax reform the GST needed to be at 5% in the future.

"I think it's a more logical, it's a more honest, it's a more transparent way of making the decision, but also it's recognising that with that additional revenue you can do more and you can do more in terms of tax reform.

"I don't think anyone is suggesting that 5% should be where we start, given the policy letter that's in front of us.

"But I think you can set out a path by which you get there whilst ensuring that it's a decision which anchors those protection and mitigations which are needed."

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