Guernsey Prepares Enabling Law For Possible Goods And Services Tax

by Amanda Banks, Tax-News.com, London

08 June 2009

Guernsey’s Treasury and Resources Department is taking draft legislation for a General Sales Tax to the States for approval this month. The government has however insisted that it does not seek to introduce a GST, but instead is merely considering its options.

In June 2006 the States debated and approved the Policy Council’s Report on a ‘Future Economic and Taxation Strategy’.

One of the resolutions arising from that debate was “to direct the Treasury and Resources Department to investigate a system of goods and services tax, including that introduced by the States of Jersey, and to direct the preparation of the necessary enabling legislation.”

A statement from the Guernsey government underlined that the department is only presenting an enabling law. If the States decides to introduce a GST at a later date, this could be done, following a debate on the detail and the subsequent preparation of an Ordinance to this law. It could even be possible to structure a system broadly compatible with the system introduced in Jersey.

Treasury and Resources Minister Deputy Charles Parkinson said: “I don’t want the appearance of this legislation to take anyone by surprise. Its publication does not mean a decision has been taken to introduce a GST.”

“The States have previously directed my department to prepare an enabling law and it is a sensible move if the States have, at some stage in the future, to introduce such a tax.”

The States would only introduce a new tax after consideration of a detailed report, which would make recommendations on issues such as the rate of tax to be applied, proposed exemptions and collection methods.

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