GST would have 'detrimental' effect on retailers, say Guernsey Retail Group

Could Guernsey be set to introduce GST next year? Credit: ITV Channel

Guernsey Retail Group have said introducing GST in the island would have a "hugely detrimental effect on local retailers".

Many island retailers have also said they are worried that a goods and service tax will make their businesses uncompetitive.

Guernsey Retail Group are raising the concerns once again following statements by the Policy & Resources committee who recommended a tax on consumption, as well as other measures to bring the island’s public finances back into balance.

Korinne Le Page, Head of Retail Development at the GRG said: "We understand that the States has to find ways of increasing revenues to pay for essential services, which is not an easy task, but GST is simply not the silver bullet as it is made out to be and we need to look at ways of growing and diversifying our economy.

"Any rise in local prices through GST means retailers will find it harder to remain price competitive and lead to lower levels of investment in the sector. We believe this would also act as a barrier to entry for new stores, either local or UK outlets, particularly at a time when retail is bouncing back.

"Any sort of tax on purchases increases prices so local consumers will simply switch to the internet. It is unlikely to affect discretionary spend as we believe consumption will stay the same, but there is a risk that this income will move off-Island so there is a significant risk to retailers."

States members in Guernsey will debate whether or not to introduce GST in the New Year.