Proposed island GST to be set at 3%, says Treasury lead

A goods and services tax due to be included in proposed tax reform in Guernsey will be set at 3%, Treasury lead Deputy Charles Parkinson has told the BBC.

It was originally the preference of Guernsey's top committee, Policy and Resources (P&R), to have a 5% GST, or 6% if food was exempt.

But, after pressure from business and the public, P&R announced it would publish a "blend" of reforms to tax.

Parkinson said: "There will be a reduced standard rate of income tax of 15%, there will be a range of changes to motoring taxes and social security contributions as well." The cut to income tax will be up to a certain threshold but, when pressed, Parkinson would not confirm what the threshold would be.

The States accounts show that despite a £45m surplus in 2025, longer term there is a funding gap of around £50m.

Parkinson said he was hopeful the blend of taxes would help plug the gap.

"Taxes are famously a certainty in life, the amount they will raise is an estimate," he said.

"We are trying to broaden the tax base to make our income streams more stable and inevitably trying to raise more money from the public, which is not welcome."

The full details of the tax reform package is expected to be released on Monday, with deputies debating it in July.

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