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13 November 2014

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You are in: Jersey > Inside the States > Other Business > No GST on food?


No GST on food?

Proposals by the Council of Ministers suggest that GST on food should be zero rated.

Islanders may no longer be charged GST on food from next Spring.

The Council of Ministers has decided to scrap the sales tax for food because of increasing prices, but won't do so for domestic fuel.

Instead those that need help heating their homes will have winter fuel payments increased and the tax on petrol and diesel won't go up in next years budget.

The government says it's expecting to get £5 million more from GST than expected and wants to help islanders facing higher food shopping bills.

The full list of proposals to help islanders hit by the increase in fuel and food costs include:

  • Zero rating GST on food,
  • Increasing  winter fuel payments by 20%
  • Freezing fuel excise duty in the budget
  • Maintaining the current rates of income support, including the allowance for GST on food, and the scheme for people who do not receive income support but are below the tax threshold.
  • Deferring from January 2009 until October 2009 any reductions in income support for people who receive transitional relief.
  • Introducing a programme of home insulation grants and energy efficiency advice to help the public to reduce their fuel bills
  • Accelerating the programme of insulation for States Housing to help States tenants reduce their fuel costs.

This announcement comes after a proposition lodged by Deputy Labey called for a zero ratings of GST on food and domestic fuel.

Although the Council of Ministers support the zero rating of GST on food, they are opposing it on domestic fuel.

In a press release the Council of Ministers stated that “zero rating domestic fuel would have most benefit for people with large houses and swimming pools, but would have much less effect for people who already cannot afford to properly heat their homes.”

It went on to explain that the intention was to increase winter fuel allowance and invest in home insulation instead.

The Council of Ministers have always argued for a simple, low, flat rate of GST to make it as simple as possible to administer, however they have said that, although that goal remains as relevant today as ever – a response was needed to the increase in food prices.

They have said that “removing GST on food will have a direct effect on costs for everyone.”

Over to you

What are your thoughts on the removal of GST from food? Should it be removed from domestic fuel as well or is the decision to invest in insulation a better option?

What other measures would you like to see the States of Jersey introduce to help islanders being hit by the increase in food and fuel costs?

last updated: 22/08/2008 at 10:44
created: 22/08/2008

Have Your Say

The BBC reserves the right to edit comments submitted.

As a retiree on a low fixed income - I have roughly calculated that my yearly tax "contribution" has now at least doubled with the introduction of GST. Not impressed!

food has and allways will keep going up! i think the first post sums things up nicely.End result is allways the same,and there is nothing you can do about IT

Many of your readers are quite right - GST should never have been placed on food in the first place, Indeed, we didn't and still don't need GST now. While the simple fact it is to removed is good news I just hope the public see this for the desperate pre-election scam it is. Remember those who voted for this regressive tax time and time again until now and make sure they are voted out come the elections. You can practically count on one hand those who were against GST from even before the last elections and have remained consistent - the JDA, Deputy Breckon et al. Check out the voting records and use your vote accordingly. Senator Le Sueur as CM is a sure ticket to economic oblivion.

they were quick enough to add GST to food so why should it take them until spring for it to be abolished grrrrr - GST should never ever have been added to food in the first place - morons .. :0( - GST should never have happened ... period

Mr Sensible
We all pay through our taxes to employ second rate polititians, who in turn employ via the states ,payroll , spin doctors and various high paid officials who should have warned our puddings who sit in the chamber that GST on food should have not been voted for in the first place.Let us see who of the states members who vote for the removal of GST on food who only a short while ago voted for it. As for the removal of the tax on food consumers will be losers again the stores will remove the 3% but round up to the nearest penny just as they rounded up when they put GST on food , yes you guess correctly we will all pay for the weak willed states members who sit doing nothing, drinking coffee all day in the states chamber meetings instaed of working for the people who voted them in ,roll on the next elections and lets vote these bumbling fools out.

All the evidence clearly points to one winner if you remove GST on food… the rich. Actually there are lots of other winners… all those who hold shares in food retailers over here (oh – I guess they’re already rich). Is anyone actually that naïve to think supermarkets are going to reduce their food prices by 3%? All that will happen is retailers will hide the GST in the ‘increased cost of food’ get out clause, make more profit and reward their rich shareholders richer.Pathetic electioneering that sets precedence for further exemptions on garbage like the Daily Sport.

Watch the lawyers get rich when the arguments and appeals start over what exactly is food. Sweets included, beer ? Plus extra civil servants to administer it all.

To "Not eating cat food". Can you imagine the complexities of drafting the legislation so that "basic foodstuffs" (whatever they are) may be properly defined. Should we exempt spider crabs - the food of the people - and tax lobsters - the food of our capitalist oppressors? I could cite thousands of examples, I only wish I was working as a Law Draftsman, my overtime payments for the next few months would be massive!

Just more problems and cost for the wholesaler and retailer and also the tax collector. Who do you think will pay the cost of implementing the scrapping of GST on food? As far as I am concerned they have been pushed into this. This was a fair tax for all. The rich who spend more pay more, the less well off pay far less. The money collected in tax on food should have been divertly to helping the less well off. Mr Le Sueur you made a decission to have few exemptions. You should have stuck to your guns for the good of all.

Mike Scott
I'm not happy, but all things considered i'll keep my prices at the rate even though i produce 3 rate bread! hmmmmmmm bread that goes off before you leave the shop...bargain

Thousands told them so and finally the penny has dropped although Chief Minister spins that it "not a climb down".Shops will not reduce by 3% because they have to recover even more costs of relabelling and altering software etc What a debacle !We are now sailing on a rudderless ship with headless chickens at the helm with very rough seas all around usAnd still Terry LS wants to be the next Chief MinisterGod Help us all....

Now eating cat food!
Why wait until Spring? To wait until is just a cynical ploy to see certain people voted back in, as well as the chief architect of GST getting voted in as chief minister!This is electioneering of the cruellest and most callous kind. Those people who find life hard enough will have to endure their first and only Christmas under the jackboot of this tax knowing that it could have been removed MONTHS ago!

They were told by experts not to add it to food in the first place and why are we waiting 6 more months for this U-turn to actually happen?Yet again another example of the contempt with which Terry le Sueur regards the electorate.This man is clearly not up to the job and should be removed immediately.

Ashley F
The damage has been done. They didn't foresee the implications of their lazy and greedy idea and now the island has pretty much been ruined beyond repair. Do they now presume that shop keepers and stores will go through the effort and cost of swapping back and not transfer that defict onto the customer? Of course they will! Not to mention the fact that shops now know that people will pay these prices (as the have to) and shops will always charge what people are prepared to pay. The whole thing is a disaster.So, basically, they've effectively sold their souls and burned down the island for 55 million a year. It's a joke! If they had some half decent money traders working on the islands finances then they could genorate that kind of money in the same way that every bank on the island does, with huge success, every year. Morons!

With inflation likely to be 7% by next spring, we can look forward to no GST but still 4 or 5% increases in the cost of food.

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