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Jersey To Delay GST Pricing

by Jason Gorringe, Tax-News.com, London

16 July 2007


When Jersey ’s Goods and Services Tax is introduced next year businesses will be able to choose whether or not to display tax inclusive prices on their products, the government has announced.

The Economic Development Minister and the Treasury Minister have agreed to delay a decision until the new tax has been in place for 12 months. Then they will review price marking practice among Island retailers and carry out a survey of shoppers, to identify a policy which will be most appropriate for the future.

Economic Affairs Scrutiny Panel Chairman, Deputy Geoff Southern has announced that he and his members will examine the price marking issue and publish a report on whether retailers should be required to display prices which include tax, or whether the tax should be added on at the till.

Scrutiny’s report isn’t expected until October, delaying the States debate on the subject. ED Minister Senator Philip Ozouf believes a decision must be made before then, to allow businesses to prepare for implementing GST next year.

While Jersey ’s Chamber of Commerce has campaigned against displaying prices which include the tax, The Jersey government has argued that this contradicts what happens in almost all other places. In the UK, for instance, it is considered so important that consumer rights are protected, that shops are breaking the law if they don’t display an accurate price on their shelves.

Ozouf stated: "I recognise that GST is a big change for our larger retailers and Scrutiny’s timetable will not allow them time to plan for its introduction. We are working hard to support businesses in understanding what adjustments they will have to make when the tax is introduced, but we cannot ask them to do the impossible. It is a pity that Scrutiny has only just decided to carry out this review, but I respect their right to do this work. The important thing for Jersey is that GST comes in next year and this will still happen."

Senator Ozouf said that his commitment to consumer protection remained unshaken. "I believe that shoppers should be able to see the price they will have to pay clearly displayed on the shelves. But it is the job of those in government to listen and this is what I am doing – I have listened to business, I will listen to Scrutiny and next year I will listen again, to see how the shopping experience works in practice, with GST."

Treasury Minister Senator Terry Le Sueur added: "GST is a big, but very necessary, change for the Island . It is an essential part of Jersey ’s fiscal strategy, which lays the foundation for our continued economic success. GST is being introduced to compensate for the loss of tax revenue which will occur in 2010 when Jersey registered companies stop paying tax on their profits. This 0/10 tax option was chosen by the States to safeguard the financial services industry. Already, we are seeing this was a wise decision, with unprecedented growth and confidence in our key industry."

Senator Ozouf added: "I feel passionately about this because shoppers must be told clearly how much they are being asked to pay for their purchases. But we have to be pragmatic and we can’t move too far, too fast. I very much want to work with businesses to get the best solution for the whole community and I will be interested to see Scrutiny’s conclusions. Until we carry out a full survey of all views and opinions next year I will be requiring shops to display appropriate signs indicating to their customers whether GST is marked on the shelves, or added at the till. I very much hope that shoppers will find this adequate protection during the introductory period and help them to understand the real price they will be asked to pay in any retail outlet."

To protect consumers, Senator Ozouf said he will ensure that when GST is introduced, retailers which intend to add GST at the till will be required under Article 94 of the GST Law to inform consumers clearly, by appropriate signage, that their displayed prices do not include GST.

A comprehensive report in our Intelligence Report series giving background tax and residence information on many of the key offshore jurisdictions is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report4.asp

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