Senator Philip Ozouf argued that such a rate could be damaging to the industry and could lead to prices being increased.
As part of the Budget proposals, Treasury Minister Alan Maclean has called for the introduction of a retail tax on large shops that earn more than £500,000 in profit.
The amount of tax will be charged on a sliding scale, from those with profits of £500,000 at up to a threshold profit of £750,000. The sliding scale would increase gradually to 20 per cent.
However, Senator Ozouf said that the top rate should be capped at ten per cent, bringing it in line with the highest rate of tax paid by finance companies under the zero ten regime. To cover the shortfall that would be created, Senator Ozouf suggested placing more tax on cigarettes, alcohol and gambling.
On Monday, the Jersey Retail Association threw their support behind Senator Ozouf’s proposals. However, the amendment was ultimately rejected in a series of five votes by Members yesterday.
It means that the 20 per cent tax rate will stand, assuming the Budget is approved as a whole later this week.
Senator Ozouf said: ‘I can’t see how 20 per cent is the right level of tax. The number one concern people have is the cost of living at this time. I truly believe that the proposal for 20 per cent tax will affect grocery prices and will see an increase in the cost of living.’
Under his plans, duty free allowances for cigarettes would have been cut from 200 to 40 and a ten per cent tax would have been levied on bookmakers and liquor vendors.
Senator Maclean said that the Council of Ministers would commit to a review of each of these areas but urged Members to reject Senator Ozouf’s proposals.
He said: ‘There is some merit in the early parts of this amendment. On the first three parts [on cigarettes, bookmakers and liquor vendors], the Council of Ministers give an undertaking that a review will be undertaken.’
St John Constable Chris Taylor compared Senator Ozouf’s proposals to a ‘dog’s dinner’, while Deputy Simon Brée said this could be an example of the States trying to dictate people’s lifestyle choices.
Assistant Home Affairs Minister Deidre Mezbourian added that Customs officials needed greater explanation and resources to police a reduced duty-free allowance and expressed concern that it could lead to ‘commercial smuggling’ of tobacco and a black market trade.
