JERSEY businesses say they have seen no benefit from controversial changes to GST which the government said were designed to help Island stores in the face of fierce competition from online retailers.
On 1 July last year, the de minimis threshold at which Islanders pay GST on imported products dropped from £135 to £60.
And larger online retailers 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.
The government has now confirmed that 44 large online retailers with an annual Jersey-related turnover above the £300,000 minimum required to levy GST on all online goods have registered to charge the tax.
Treasury Minister Ian Gorst said last year that the GST changes would add at least £1.1 million a year to the public coffers.
And revenue comptroller Richard Summersgill explained at the time in a blog post that the changes aimed “to ensure fairness between local and offshore retailers and to eliminate the administrative concession on lower-value items”.
However, speaking to the JEP, Voisins Department Store owner Gerald Voisin said: “We’ve seen absolutely no difference at all and I always thought it was disingenuous to say that the government are doing it to help retailers when they were doing it to raise more tax.”
Another large Jersey retailer, which did not want to be named, said that the changes were never going to be the “magic pill” that would help Island shops.
“It hasn’t made anyone’s decision to buy or not buy on Amazon any different and it was never going to. The impact it was always going to have was to create more government income from GST.”
Ben Stone, director of electrical retailer Fortuna Euronics, said he had also not seen a difference, adding: “The giant that Amazon is, people will always default there.
“If someone wants to buy something from a shop, they are buying it because they need it more urgently – otherwise they’re using the likes of Amazon to get something they would be happy to wait for.”
Recent increases in shipping costs, he continued, were a bigger problem that was causing trouble for local retailers – and any boost seen from GST changes would have been immediately wiped out by those.
“The changes have just cost everybody more,” Mr Stone said.
Karen Mackay, owner of Wild Atlantique in King Street, said that while her business had not seen any benefit from the changes – which it had not expected to, due to the local, hand-made nature of her products – they had instead cost her.
She explained: “Now, when I order things for the shop that I can’t get in the Island, I’m paying more for them. These can be small parts that we use to make our items or things like gift bags. These are all a little bit more expensive.”
Rhiannon Small, senior manager of the Goods Control Unit at Customs and Immigration, said that work took place before the changes came into effect “to ensure a smooth transition”.
She continued: “As a result of some large online retailers collecting GST at the point of sale, correctly manifested goods purchased from those online retailers can be delivered quicker, which is clearly a benefit of the changes.”
Jersey Post, meanwhile, said it had not seen “any noticeable impact on inbound or outbound volumes” since the changes came into effect last summer.
