Select a region
In the year since Guernsey's States rejected GST, Jersey has made an additional £4million through changing its GST threshold for imported goods - on top of the £100m it usually makes via the charge.
A leading businessman in Jersey is now suggesting that money be re-invested in support measures for the island's high street.
It was originally predicted that a drop in the island's 'de minimis' level last year – the threshold at which the Goods and Services Tax is charged on goods bought outside of the island – would net Jersey's Government around £1.1m annually.
However, as Express reported in Jersey earlier this week, the new rules have added at least £4m to the island's coffers since July 2023.
Jersey's Chamber of Commerce CEO Murray Norton has since suggested that the "windfall" could be invested in island businesses and "making St Helier more attractive for shoppers".
Mr Norton said the changes had been "as much misunderstood as controversial" at the time, but that the revenue could "support investment [in] local shopping and our local retail sector".
Pictured: Jersey's Chamber of Commerce CEO Murray Norton said that the revenue "could support investment local shopping and our local retail sector".
He continued: "Chamber spent many hours discussing the merits of levelling the playing field slightly, by ensuring the biggest off-island online retailers collected 5% GST, as a matter of fairness to local retailers who had to do the same."
Mr Norton added: "It was never intended to reduce online shopping, but more of about fairness and income to Jersey.
"Our maths indicated that the income which would come back to Jersey would be way higher that the government was estimating, not being perceived of much income, was one of the reasons they delayed its implementation.
"It is something of another windfall for the government and it would be good to see that ‘unexpected’ revenue used to support greater investment in our local retailers and invested in making St Helier more attractive for shoppers."
Pictured: Customers buying goods through Amazon now pay GST in Jersey.
On 1 July 2023, the value at which buyers must pay GST on imported goods—the de-minimis level - was lowered from £135 to £60 in a move Jersey's government said aimed to benefit bricks-and-mortar retailers by minimising the incentive to shop online.
Larger online retailers also became subject to the same rules as the island's stores, meaning orders of any value from companies such as Amazon were subject to the 5% sales tax at the point of purchase.
Following the move, a £100 item now costs £105, with the £5 tax going directly to the Jersey government.
By March of this year, 44 large online retailers with an annual Jersey-related turnover above the £300,000 minimum required to levy GST on all online goods had registered to charge the tax.
Former Jersey Treasury Minister Ian Gorst had previously predicted that the changes would add at least £1.1m annually to the island's public coffers – but the actual revenue appears to have far exceeded that figure.
Jersey's government recently estimated that the additional GST receipts from these retailers have brought in more than £4 million.
Answering a written question from Deputy Raluca Kovacs on how much revenue the changes had netted Jersey's government, the island's Treasury Minister Elaine Millar said: "Early analysis suggests that the first full year's additional GST receipts from the mandatory registration of online retailers may exceed £4m."
"This arises from the registration of offshore retailers and the consequent reduction in the number of importations to which the de minimis level could apply," she continued.
Pictured: Over £125 million in revenue has been collected by Jersey's government since introducing controversial changes to the taxation of imported goods last year, according to the island's Treasury Minister.
"The majority of goods bought from these large offshore retailers now attract GST in the same way as goods bought from Jersey retailers, fulfilling a long-standing commitment of successive governments since GST was introduced."
Monthly GST collections have fluctuated since July last year, peaking at £14.59m in January 2024 as a potential consequence of the Christmas present rush and reaching their lowest point the following month at £4.78m.
In total, approximately £125.18m was collected, while the average monthly collection is around £8.94m.
While the government said the move was designed to help island stores in the face of fierce competition from online retailers when they brought the changes in, many local businesses were sceptical about these claims.
Jersey first introduced GST in 2008.
Guernsey came close to introducing its own GST in 2023 but ultimately the States rejected a package of tax and social security reforms which included the goods and services charges.
Those proposals were intended to address the gap between public spending and income of around £100m per year, every year.
EXPLAINED: More than just GST...
GST will not damage small businesses, P&R says
GST rejected again but hospital project will continue as planned
Comments
Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.