Guernsey A&F Committee President Opposes VAT Proposals

by Jason Gorringe, Tax-News.com, London

22 August 2002

Guernsey's Advisory and Finance Committee President, Laurie Morgan has spoken out against Jersey Finance Industry Association proposals to impose VAT in the Channel Islands.

Speaking to the Guernsey Press and Star on Tuesday, Deputy Morgan explained that:

'For five years we have said that we should not have VAT, although we have said in the last four budgets that we are too dependent on income tax. The time will come when we will have to get more from indirect taxation to allow us to be more flexible with income tax, but I am not in favour of VAT.'

This viewpoint was also expressed by Stephen Jones, Chairman of the Guernsey International Business Association (GIBA), who warned that the introduction and administration of a VAT system would lead to a great deal of extra bureaucracy and expenditure, and would additionally be unfair on Channel Island residents with lower incomes:

'A sales tax is being considered but personally I think a tax that hits low earners is one I would favour least,' he told the Guernsey Press, adding that: 'I hope the solution can be found without reverting to a sales tax. GIBA is not pressing for it to be introduced.'

One possible alternative to VAT which has been raised during discussions is the introduction of an employment tax.

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