22 April 2008
All householders will receive a Consumer’s Guide to GST this week. The Treasury and Resources Minister, Senator Terry Le Sueur is sending out the guide with a letter that explains what to expect when the new tax is introduced on Tuesday 6 May.
The guide explains that goods in the shops will be marked with the GST inclusive price. It also clarifies the new Customs processes for anyone buying items from outside the island.
Senator Le Sueur commented: “We are trying to help consumers get ready for the start of GST in two weeks time. There are going to be changes to prices in the shops and I want to make sure the public know that the prices they see are what they will pay. There are a small number of items that will come into the Island pre-priced, such as books, newspapers and pre-priced foods. Shopkeepers will display a prominent sign to tell you these will incur an additional 3% at the till. ”
GST is being introduced as part of the ongoing Fiscal Strategy for the Island. In preparation for its introduction Jersey ’s benefits system has been fundamentally reorganised into ‘Income Support’. This will protect the lowest earners from the effects of GST by increasing their payment by 3% for those items that would incur the tax. Those above the income support level, but not liable to Income Tax, will receive an annual payment to help offset GST costs.
Middle earners are also being given a helping hand. In the 2008 budget income tax thresholds were increased by an extra 3.5%, on top of the proposed increase of 3%, to help mitigate the effects of GST. This increase in income tax exemption limits is in addition to a 20% increase in the tax allowances for children and students in higher education. The 2008 Budget also announced extended discounts on stamp duty for first-time buyers.
These increases in income tax exemption thresholds and allowances are designed to reduce the impact of GST on low and middle earners, particularly those with families. It means a working couple with 2 children (one at university), paying about £14,000 interest on their £200,000 mortgage, can earn over £46,000, before they start to pay any income tax.
Meanwhile the rise in Stamp duty discount for first time buyers is intended to help people entering the property market.
Although GST will increase the tax burden for consumers, the significant improvements in the last Budget will reduce the impact of the introduction of GST and leave the Island in a strong position to deal with future pressures.
Notes to editors:
1. For further information, please contact Senator Le Sueur on 07797718798.
2. Senator Le Sueur will be available for a photo opportunity and comment in the Customer Services Centre of Cyril Le Marquand House from 1130-1230 Tuesday 22 April.