The introduction of a goods and services tax or GST would have a hugely detrimental effect on local retailers the wider community says the Guernsey Retail Group.
Having previously voiced concerns that the tax would make local businesses uncompetitive, the Guernsey Retail Group (GRG), which represents the sector, has surveyed members and its findings indicate that some believe they could close, resulting in empty shops across Town and the Island.
The Group is concerned of the harmful effect this would have on community centres including St Peter Port, St Martin’s, St Peter’s and The Bridge.
Korinne Le Page (pictured), Head of Retail Development at the GRG said: “The outcome of our poll to members shows that many feel they would close or downscale if this tax is introduced, which would be very harmful for Town and other centres and naturally reduce the choice for local consumers.
“We believe this would negatively impact on our local community and completely ignores the value retail brings to the Island. The sector here has recovered well from the pandemic as our shop vacancy rate stands at 7.8%, comparing favourably with the UK which is running at 13.9%.
“This is not the time to introduce a new, blanket tax when inflation and the cost of living are so high. Timing could not be worse and even if this comes into effect in two years, we have learned that the impact of inflation is long lasting and yet another hurdle for businesses to overcome, in addition to increased import costs, staff shortages and the ongoing threat of online shopping.”
In the survey, GRG members indicated that a new tax on consumption could add substantial costs for changing tills, introducing systems to collect and report tax and the time necessary for administration. All these would have to be borne or passed on, resulting, ultimately, in higher prices for local consumers.
The GRG is also concerned how a new tax would be perceived by visitors to the Island, particularly with the proposed threshold of £300,000 annual turnover determining whether or not a retailer charges GST.
Ms Le Page added: “Even with the £300,000 level, not only would Guernsey be seen by tourists as now having a sales tax, it also doesn’t necessarily mean businesses with a higher turnover have sufficient funds to spend on the various changes that will have to be made. Also, this threshold will thwart growth as some retailers will want to remain below that figure.
‘”We strongly believe that that all the alternatives which could address Guernsey’s financial issues should be seriously considered, as the unintended consequences of GST could have a substantial and long lasting impact on our whole community as well as the economy.”
