Minister expects ‘tough discussions’ on retail tax rate

Minister expects ‘tough discussions’ on retail tax rate

Economic Development Minister Lyndon Farnham has said he would like to see the tax – which has a top rate of 20 per cent – halved and will be raising the matter at ministerial meetings.

However, he believes both the Council of Ministers and the Assembly are split on the issue and expects there to be ‘tough discussions’ on the retail tax.

The tax was initially mooted and supported as part of the 2018 Budget proposals. A proposition earlier this year from former Senator Philip Ozouf to reduce the top rate of the retail tax to ten per cent led to a tied vote – meaning the motion was not carried.

That decision meant that retailers earning annual profits of more than £500,000 will be subject to the new retail tax of up to 20 per cent.

Senator Farnham said that the matter had not yet been discussed by the new ministerial team but he would be raising it at Budget meetings.

He said: ‘We are due to have our first budget meeting later this month and that is when we will be discussing it in earnest.

‘The Council of Ministers and the Assembly are probably split on it.

‘My personal feeling is 20 per cent is excessive. That is what I will try to persuade Members of.’

He said the retail sector was performing well – with a higher occupancy rate in town than most UK high streets – but is facing difficult challenges if it is to continue to thrive.

‘We need to work with the sector to make sure we keep it that way and proposing a high tax on profits isn’t going to help,’ he said.

‘I, and I think most people within the sector, appreciate they have to make a contribution. It just has to be a fair one.

‘I will certainly be raising it at the first draft budget meeting.’

The minister’s comments come after Chamber of Commerce president Eliot Lincoln criticised the States for introducing ‘damaging’ policies. Mr Lincoln said that the government had made things more difficult for the sector over the past ten years and cited the 20 per cent retail tax among his concerns.

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