Guernsey has voted to introduce a goods and services tax (GST) after member states voted against an increase in income tax. BBC News spoke to Islanders in Jersey, where they have enjoyed a version of GST for 16 years, about their experiences and views on the tax.

“Everything is going up, up, up all the time,” said 90-year-old Gwen Civi.

“We just had some decorations done at the house and the amount of GST we paid for it was horrible. It makes things a lot more expensive.”

When GST was introduced in 2008 it was added to most products imported to the island at a rate of 3% in response to the government receiving less tax from the financial sector.

At the time, critics called for the exclusion of food, children’s clothing and school textbooks.

Since 2010, the GST has been set at 5% and in 2022 politicians rejected proposals to exempt foods to reduce the cost of living.

“I would prefer not to have it, ideally, but it’s been around for a while now so I’m probably used to it. 5%, I think people can live with it,” said Mark Le Brocq.

The 45-year-old believes Guernsey could lose some business from Jersey residents, who can currently buy some products cheaper there.

“I have a boat, so I could potentially go to Guernsey… if I had to buy something expensive, I would take the boat there, I would buy it there. I think (having GST in Guernsey) would would affect visitors,” he said.

“I don’t like it but I was surprised Guernsey said they were going to introduce it.”

Jenny Burden, 69, said rising prices had created a real challenge, and GST was one of them, alongside high inflation rates in recent years.

“GST makes everything essential very expensive: food, electricity. It applies to everything, phones and everything,” she said.

“We just buy the cheapest food we can buy and we have no choice when it comes to electricity, we only have one supplier.

“It’s harder for people on low incomes and retirees because your pension doesn’t cover all your expenses and you have to rely on family if you want extras.

Ms Burden said the GST had “made life a lot more difficult” and she notes the difference it makes to her personal budget “when you add it up over a month”.

Fiona Shilliday said applying GST to food meant no one could escape paying it.

She said: “At the time it was introduced because it replicated VAT as an additional tax.

“I realized when it was a small amount that it wasn’t going to last…I (can) choose to buy something that has GST added to it, but I can’t not buy something. food.

“If only the food was reduced it would be a great benefit, not just to me but to everyone else on the island.”

“Low, wide, simple and fair”

Jersey’s Treasury Minister has defended the decision to impose GST on almost everything since its introduction.

MP Elaine Millar said: “Our approach has been simple, broad, simple and fair.”

“The simplicity of charging for everything makes it easy to administer and understand.

“If we hadn’t introduced GST, maybe we should have done something else.”

She added that Guernsey may need to consider how the government will support low-income families when change comes.

“We introduced, I think, at that time, a precursor to reflect the fact that this would have a greater impact on lower-income people.

“We introduced the Community Cost Bonus, which is still alive and well and still paid to low-income families to help them with things like GST.”

As ordinary islanders feel the pressure, one higher 15% tax rate was introduced in September 2024 for large companies.

It aims to prevent organizations from leaving the Channel Islands for jurisdictions with zero or lower tax thresholds.

The majority of companies will continue to operate under the regime rule zero ten which sets the standard corporate tax rate at 0%, while financial companies pay 10%.

In Guernsey, plans to introduce GST were twice rejected in 2023 and the government was told that without an increase in income tax, public projects including the hospital expansion and the construction of additional housing, could be eliminated.

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