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Tuesday, 17 May 2011

"Senator Alan Breckon Tries To Help Jersey's Poor People Again"

Another attempt to remove GST from food and fuel

Another attempt is being made today to remove GST from food and domestic fuel in Jersey.

Previous States votes have been very close, but there could be more opposition this time.

Treasury minister Philip Ozouf is against the changes being proposed by Senator Alan Breckon on the grounds that it would make it more costly to gather GST and that of the £8 million saved, only £1 million would go to the poorest people in the island.

In urging States colleagues to reject the exemptions, Senator Ozouf argues it is best to keep the GST system simple. He says the complexities involved with zero rating food and domestic energy will increase the cost of compliance for businesses and would also increase the cost of administration by at least £200,000 to £300,000 a year.

He said: "All the expert international advice available indicates that introducing GST exclusions would be a less efficient way to support those on lower incomes than the current system of income support and GST bonuses."

Of the over £8 million revenue that would be lost from excluding food and domestic energy, less than £1 million would go to the 20% of the population on the lowest income (those with less than £20,000 a year) but more than £2.5 million would go to the top 20% (those earning more than £73,000 a year).

If the States of Jersey had not been so bloody greedy in the first instance, none of this would be an issue now. BUT....they just couldn't help themselves when it came to squeezing the little guy for every last penny they could!

‘GST exemptions could lead to costly lawsuits’

GST exemptions could open the Island up to multi-million pound lawsuits and the threat of the States being bound by EU court decisions, States Members have been warned.
In the run-up to the debate on GST exemptions for food and domestic fuel due to start during tomorrow’s States meeting, Islander Craig Leach said that a simple flat-rate sales tax with as few exemptions as possible was the best way forward.
Recent reports in the UK have stated that fast food retailers are poised to launch tax claims for billions of pounds worth of refunds over a recent EU court verdict.
The European Court of Justice ruled that when fast food outlets do not provide much service, any food being consumed inside the premises should be treated as VAT free.
Mr Leach, who worked in international banking and investment, says that the EU case is a warning that Jersey could open a can of worms by allowing GST exemptions.

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