Dismayed At The States Adoption Of The 20% Retail Tax.

Thursday 30 November 16:25

The decision made today by States members to introduce this new 20% retail targeted tax is extremely damaging for all sectors of commerce.

Despite severe warnings from both the Jersey Chamber of Commerce and Jersey Retail Association, that such a tax would negatively impact future investment in training, premises, products and services, the States have chosen to ignore sector-wide warnings and push ahead with the tax as part of the 2018 Jersey Budget.

As is often the case with States policy proposals, little to no consultation has been carried out with commerce and there is a complete lack of understanding by the States, in terms of the unintended consequences that such as tax will inevitably generate.

Large retailers, which are the target of this new tax, will now either shelve plans for development or substantially reduce them. Employment opportunities may stagnate, as will investment in training. The ultimate loser will be the Jersey consumer, who may have to pay higher prices, especially in food retail. Consumers who, as a direct result of the existing unfair GST de Minimis level, are already encouraged to shop off-island, and who will now be driven to look and shop elsewhere.

Ultimately this tax could threaten the future viability of retail businesses, jobs and potentially see a reduction in the ITIS, Social Security and GST take for the States. All of which clearly erodes the £5.5million that the Treasury Minister has earmarked to raise by this tax.

Clearly, a precedence has been set today. Publically the Treasury Minister has not ruled out the possibility of rolling out the 20% tax to all sectors of commerce and as a result of the decision today is now going to review the taxation of duty-free, bookmakers and large liquor vendors.

While the Jersey Chamber of Commerce is in favour of thorough consultation and substantive fiscal impact assessments to backup any change in policy, Chamber cannot support a government that continuously proposes and adopts piecemeal change to its own tax policy. Principally when today’s 20% retail tax, is aimed at plugging the void left in part by governments failed Liquid Waste and Health Charges.

Continued taxation of businesses should not be the States cash-cow solution. Especially when government continues to ignore the millions of uncollected potential tax revenue, from global off-island retailers, that deliver to Jersey on a daily basis yet do not charge or collect GST.

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