Cost Of Introducing GST Under By £50M

Monday, 9 October 2023 10:41

Deputies Gavin St Pier and Heidi Soulsby will lodge a 'fairer alternative' amendment to the tax debate.

Deputy Heidi Soulsby says the effect of GST on the index-linked States pension fund hasn't been factored into P&R's calculations.

Deputy Heidi Soulsby has analysed P&R's figures and says the first year of introducing GST - if approved - will cost in excess of £90M.

That's £50M more than P&R's estimate, because of the effect of the tax on the States pension fund, which is index linked:

"If there is any change in the underlying rate of inflation and inflationary effect, which we know GST will have, that will impact on the pension scheme. It'll basically take a chunk out of that fund and, whether it's under or over invested, it's effectively impacting the taxpayer."

"It'll be a one-off deterioration in the funding level of around £50M. That's a big chunk. It'll take the whole cost of GST for the first year to £90M."

Deputy Soulsby is allied with deputies Gavin St PIer and Sasha Kazentseva-Miller over their approach to public finances. They call themselves the Fairer Alternative and intend to put forward their own plans ahead of next week's debate:

"I suppose you could call it scenario four, after their three. It puts together a balanced package which we think is pragmatic and realistic, particularly at this time in the States term."

Deputies will debate GST for a second time next week, beginning a day earlier than normal on Tuesday 17 October.

P&R's first attempt to bring it in was defeated in February.