Have your say on the Government's GST review

We have arranged to meet with the Treasury office to discuss this review and want to hear your thoughts. We represent you, the consumer, and the more we know about what you’re thinking, the stronger the argument we can approach the Government with.  

The Government of Jersey has announced that they are reviewing the way GST is collected on products imported into Jersey by ‘personal importers’.

This review will possibly include the complete removal of the de minimis (which was reduced from £240 to £135 in October 2020), resulting in the need to pay GST on all online purchases. 

It appears the Government wishes to instruct retailers based in ‘the country of origin’, such as the UK, to include GST on all items bought by and delivered to Jersey residents, and then pay the GST totals on to the Treasury department.

GST is what’s known as a ‘regressive tax’ as the current rate of 5% is applied uniformly across all goods and services, thereby negatively affecting low-income earners, as it takes a much larger percentage of income than from high-income earners. This can be clearly seen in the below examples: 

For a product costing £100 we pay a total of £105 (£100+£5 GST (5%)): 

– Impact on low-income earner (minimum wage) 

For someone earning the minimum wage of £8.32 per hour (as at 1 April 2020) this £5 GST charge represents approximately 60% of their hourly rate.

– Impact on middle-income earner (£50,000) 

For someone earning the wage of £26 per hour, this £5 GST charge represents approximately 19% of their hourly rate. 

– Impact on high-income earner (£75,000) 

For someone earning the wage of £39 per hour, this £5 GST charge represents approximately 13% of their hourly rate. 

The announcement states that Government policy has long been a ‘fast follower’ of the EU and UK, and it wishes to follow suit on collecting taxes on cross-border sales more efficiently and effectively, as well as levelling the retail playing field.  

We also suggest that there are far better ways of levelling the retail playing field rather than simply increasing taxes. One such idea being the reduction of commercial property rents, especially in King Street and Queen Street, which in turn should allow retailers to reduce their costs. We have previously sent other ideas to the Chief Minister. 

We are aware of several instances where a UK retailer has refused to remove VAT, or wrongly included it in the cost, and GST is then charged on top of that – a tax on a tax – which the GST law allows. We will strongly push for VAT to be removed from all goods at the time that GST is added by the retailer.

We’re concerned that for some large retailers, the changes required to their systems and administration process, may be enough for them to simply stop delivering to Jersey, thereby reducing our choice even further. 

Please email contact@consumercouncil.je with your views so we can put them to the Treasury office.