Removing tax from food could cost £14m – minister

It would cost the states £14.4m a year to remove the island’s goods and services tax (GST) from food, the treasury minister has said.

Answering a written question from deputy Lee Carpenter, senator Alan McLean said the removal of GST from essential grocery items in shops would mostly benefit the richest islanders because they spent more.

An assessment found those with the lowest household income would save 12% per year compared to the highest household saving 28%.

McLean said when GST was introduced the states agreed to compensate islanders by improving personal tax allowances, uplifting income support payments and targeted support through 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.

On Monday, people in Guernsey protested a proposed 3% GST which is due to be debated this week and, if approved, introduced from 2028.