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COMMENT: Time for big business to play its part by paying ‘Tesco tax’
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NEVER before in Jersey’s history has there been a shop offering quite so many different duvet covers as the new Dunelm at Grande Marché.
I could not believe, during my first visit there last week, that bedding could come in as many colours, patterns and textures.
Their curtain options, too, were pretty impressive. And don’t even get me started on their incredible selection of rubber ducks.
I love a good homeware shop, especially ones in which I can actually afford to get properly stuck in.
I’m already planning my next trip for a new pair of curtains, four rolls of wallpaper, a glitter rubber duck, as many Tupperware containers as I can carry and a set of rose gold cutlery, because you know, they may come in handy for nice Instagram snaps.
Of course, I’m mildly annoyed that they are not removing the VAT but the choice and prices have mitigated that factor, and mellowed my reaction.
Dunelm could be one of the shops that would end up being hit by Treasury Minister Alan Maclean’s Budget plans to tax shops whose annual profits exceed £500,000.
Currently, retail companies pay no tax on the profits they make in the Island and, should it be introduced, the new business tax would affect companies owned locally and those owned elsewhere. It would include the large UK retail chains operating in the Island and is designed to increase States income by more than £5.5 million a year.
It is expected that the new ‘Tesco tax’, which would be charged on a sliding scale on profits between £500,000 and £750,000, when it would reach the maximum 20 per cent rate, would affect around 20 businesses.
The plans have met with opposition from retailers and the groups that represent them.
The Chamber of Commerce, for example, has warned that it could set a precedent to tax other sectors of industry, affecting economic growth and eroding the Island’s current tax structure, which they say has previously supported business development.
The Chamber’s vice-president, Mark Cox, has acknowledged that commerce does need to make a fair contribution to the Island.
The Jersey Retail Association has said it plans to fight the proposals, adding that the introduction of a ‘Tesco tax’ would give online retailers another unfair advantage over the high street. It has warned that the new tax could ultimately lead to increased costs for consumers.
JRA chairman David Elliott is, however, correct in saying that it seems unfair to charge shops a maximum of 20 per cent when finance firms only pay up to ten per cent.
No one likes new taxes, particularly ones which could set off a chain reaction that sees other sectors having to contribute more in future.
But money has to come from somewhere – and right now that somewhere is certainly not individual taxpayers.
After all, it is effectively now an election ‘year’ and recent figures have shown that the ‘economic standard of living’ for Islanders has declined by a sixth over the last decade.
The States has spent almost a decade cutting costs in the public sector, has introduced and then increased GST and later added a new tax to pay for long-term care, made people pay for some previously free services and tinkered with all sorts of areas that affect individual Islanders.
Now it is time for big business to play its part.
But they are a powerful bunch, both individually and via the various groups and associations that represent them.
They also have much greater contact with politicians than most average Joes on the street.
And they can always roll out the old ‘it will push prices up’ or ‘new shops won’t come here’ threats if they really need to.
Taken all together, big business gets to shout a lot louder, whisper into the right ears and push harder to have its voice heard.
However, with just seven or so months to go until the next election, individual voters hold more power than perhaps we would normally.
Ministers have timed this one well, both to get it through and to collect a few more votes at the ballot box come May.
And it got me thinking, what else can we push for while the power balance is tipped?
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