GST Cost To Households In Jersey Unveiled

by Carla Johnson, Investors Offshore.com, London

08 July 2008

Jersey's Treasury Minister gave a detailed breakdown of the average cost of GST to island households, in a set of written answers tabled in the States Assembly on Monday.

The figures, using detailed RPI indices, show the estimated average cost of GST for all Jersey households is GBP626 a year.

For a household containing a couple, neither of whom are pensioners, the average figure is GBP693 pa; the average cost for a couple with at least one dependent child is GBP877 and the average for a household containing a single pensioner is GBP259 pa.

The average amount of GST per year paid by lower income households (the bottom 20%) is GBP271.

That compares with an average sum of GBP318 per year, which has been allocated to compensate those on income support for the cost of GST.

Senator Terry Le Sueur explained:

“When GST was introduced we accepted it would increase the tax burden for consumers, but we increased Income Support and we increased income tax thresholds by an extra 3.5%, on top of the planned 3% increase, to help mitigate the effects of GST.

“These measures have reduced the impact of GST on the most vulnerable. They have led to the lowest earners being more than compensated for the introduction of the tax, while the impact on middle earners, particularly those with families, has been significantly reduced through increases in tax thresholds.

“Nobody likes extra taxes, but GST will leave the Island in a strong position to deal with the loss of up to GBP100m in tax revenues next year, as a result of the move to 0/10%, which is essential to protect our economy," he finished.

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