Guernsey GST implementation delayed by six months

Implementing a goods and services tax (GST) in Guernsey has been delayed by six months, until July 2027 at the earliest.

Chief Minister Deputy Lyndon Trott said it was because the next States Assembly would have to decide whether it would be applied to food.

Trott, President of the Policy and Resources Committee (P&R), said it would be a choice between a 5% tax including food, or 6% excluding it.

P&R members were answering questions on the government's Funding and Investment Plan from the States' Scrutiny and Management Committee.

Trott said that, while there had been "a little bit of slippage", pushing the GST implementation date back, he thought the new date was "realistic" and would not be delayed further.

He said he thought plans would go ahead for GST, although "it's very possible a new assembly will set its own set of priorities".

Bethan Haines, States Treasurer, said revenue-raising measures including motoring taxation and a visitor levy were being considered.

With those measures and a GST in place, she said the island's finances could be kept afloat, but, without them, it could leave Guernsey in a precarious financial position.

Trott said: "It is an inconvenient truth that we spent less per capita than other jurisdictions on public services", so while slimming down wasted money would help the situation, it would not be enough.

Nonetheless, P&R is undertaking a Fundamental Services Review to examine whether some services could be privatised.

Trott said: "There's a reason why some services in Guernsey are starting to look under-resourced. It's because they are.

"We can't get away from it. There is simply insufficient waste and inefficiency within the States of Guernsey to find the amounts required.

"So we've got some challenges, including investing at the appropriate rate in our infrastructure. But, if we get things right, I'm extremely optimistic about our future."

The Scrutiny Management Committee also asked questions about infrastructure projects detailed in the States' capital projects portfolio, the revenue service, and the States' IT system.

Scrutiny President Deputy Yvonne Burford pointed out the budget predicted for the second phase of the hospital modernisation project had increased by 300% since 2019.

Trott said the increase was partly down to an "optimism bias, which has been addressed in more recent figures".

When asked about solving inefficiency in the Revenue Service, Trott said "a crunch point was inevitable" with "thousands of people", including himself, submitting their tax returns 72 hours before the deadline.

The Scrutiny Committee also questioned P&R on its actions to improve how the States handled IT contracts after a review into Agilisys' contract.

Deputy Bob Murray said the States had not brought in an IT Advisory Board, saying "too many cooks spoil the broth".

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