Closed petition Stop the de minimis level being reduced from £240 to £135
The reduction in the de minimis level will make living standards even more difficult for Islanders given the financial impact of Coronavirus. The Government should scrap the reduction altogether.
This petition is closed All petitions run for 6 months
This response was given on 24 July 2020
The Treasury & Resources Minister does not support this petition. She considers the planned reduction strikes the right balance between the competing needs of consumers and those of local retailers.
Read the response in full
The reduction in the GST de minimis level was proposed in the draft Government Plan 2020-23 which was agreed by the States Assembly in December 2019. The full rationale for the reduction was set out on pages 158-9. The reduction was due to take place on 1 July 2020 but was postponed by the Minister, taking into account the impact of the Coronavirus pandemic.
The Minister believes that it is absolutely fair that all goods should bear GST regardless of whether they are bought from a local retailer (in a shop or online); or from an offshore retailer. It is particularly important that Government seeks to recover some of the costs of processing the additional waste that is generated from significant volumes of small-package importations.
The GST de minimis level is not primarily a tax allowance. It is an administrative easement to ensure that Customs Officers do not spend more time collecting GST on imported parcels than the GST itself is worth. Even at the margin, with a de minimis level of £135, the costs of administration are recovered fourfold. There is therefore, no justification, for maintaining the current level of £240.
It is long-standing Government policy that the de minimis level will be reduced further – possibly to zero – when the European Union and the UK introduce changes in 2021 which will require offshore retailers to charge the taxes of the country of destination of goods and to remit taxes to the appropriate national treasuries.
In the meantime, the rationale for setting the level at £135 is set out in the Government Plan: it aligns the GST de minimis level with the Customs-duty de minimis level.
The Government will continue to develop and implement appropriate measures to stimulate Jersey’s economy following the Pandemic and to help islanders suffering financial hardship. Encouraging local spending is an important consideration which has further justified implementation of this measure from 1 October 2020.
The Treasury and Resources Minister