A loud ‘no’ to Deputy Labey

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From Bob Gaiger.

MY hope is that the States will not only vote down Deputy Carolyn Labey’s proposals for GST exemptions but that Members will be robust in their rejection.

It is time for the sensible majority of States Members to send out a strong signal that these attempts to undermine the GST system must end. The proposals need to be roundly defeated.

Years before the arrival of GST many people were concerned about the Island’s almost total reliance on income tax to fund public spending. None of them could have foreseen just how important GST has become at a time when income tax receipts are in decline as a result of falling profits and the decimation of investment income (such as deposit interest, dividends and rents).

All of that is additional to the planned-for loss of corporate taxation, the impetus behind the introduction of GST.

Most of the Members who vote with Deputy Labey will do so because they are ideologically opposed to GST. They want it abolished. This despite the fact that it is even more necessary now than when it was first conceived.

The arguments against the Deputy’s proposition are straightforward. It will cause an increase in Customs officers and place an extra burden on traders in distinguishing food from non-food items. Furthermore, the £6 million tax relief has already been allocated, very sensibly, to those at the lower end of the income scale. More than that, acceptance of the proposition will open the way to yet more exemptions (this week school meals; next week books; next month children’s clothing?).

Business people will blame GST instead of the real culprit, the recession. More exemptions will lead to a higher rate of GST, leading to ever more attacks on the tax base. In theory, at least, we could be on the verge of allowing a bunch of ideologues to destroy a vital revenue-raising system.

The mistakes of the UK, cutting taxes, huge deficits and sky-high borrowing must be heeded and acted upon – starting with a resounding ‘no!’ to Deputy Labey.

Point West,

Chemin des Monts,

St Ouen.

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