Retailers renew calls for GST to be applied to all imports

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The group say that in the long run the move would be better for local consumers as it would protect the Island’s important retail industry and help Jersey shops to be more competitive.

And they challenged claims that such a system would cost taxpayers too much in administration costs, saying that Jersey Post manages to collect VAT on behalf of the UK government on goods being shipped out of Jersey, so a similar system could be used to charge five per cent on those coming in.

David Elliott, business development manager for Voisins, said he was not against online shopping, but questioned why the States were continuing to give some firms a tax-break given how valuable local retailers are to the Island.

‘Retail raises about £38 million in GST and we are also the second-biggest employer in the Island, so we are a significant part of the Island’s economy,’ he said.

‘Why would you want to give every person who spends up to £240 online a free exodus from GST? It defies logic.

‘There is an issue with admin, I accept that, but that is just processing and it can be sorted.’

Chantal Gosselin, owner of Rococo Arts and Gifts, said that the current GST collection system could be amended so that it broke even, providing a benefit for local businesses.

‘I cannot imagine it would do anything apart from break even and pay for itself, but it would be hugely advantageous to the retail industry in Jersey and surely that has got to be a benefit to the consumer as well as the politician.’

In April 2012, following pressure from a consortium of UK retailers, a loophole which allowed goods valued at under £15 to be sent to the UK from Jersey tax free was closed.

The change to the scheme, called Low Value Consignment Relief, resulted in hundreds of job losses in Jersey from companies that had exploited rule and now means that Island retailers must pay VAT on products they send to the UK.

The tax can either be paid by the customer when the product arrives in the UK, or the retailer can pay it in advance through Jersey Post.

John Marquis, store director at de Gruchy, asked why the same administrative solution could not be implemented for GST for retailers sending items to Jersey.

‘At the moment Jersey Post are collecting VAT on behalf of the UK government and they have got an automated process,’ he
said.

‘There is a simple reverse solution which could be implemented and be relatively cost effective.’

However, concerns have previously been raised that large online retailers such as Amazon could stop delivering to the Island if they were forced to develop processes to administer GST on their products. In 2014 Deputy Steve Luce warned against introducing such a requirement, describing sales of Amazon’s products to Jersey as a ‘drop in the ocean’.

However, Mr Elliott said he thought major online retailers made too much money from the Channel Islands to consider leaving them.

‘You only have to look at the levels of online sales that come into the Island. I doubt that retailers would want to stop shipping here because of an admin issue,’ he said.

The group’s comments come days after SandpiperCI chief executive Tony O’Neill warned that parts of St Helier were becoming like a wasteland and that town could be left with nothing

but empty stores and ‘the odd coffee shop’ unless the States urgently tackled the crisis in retail.

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