Petition Remove GST on food

Ministers responded

This response was given on 5 September 2025

The States Assembly has debated this issue on at least eight occasions since 2005. In all cases, the Assembly has not supported the removal of GST on food.

The most recent debate was in 2022 (P.100/2022) when the proposition was defeated by 28 votes to 17.

Maintaining a broad base of taxation with few exemptions is the key to preserving Jersey’s low rate of GST, one of the lowest in the world. It is also simpler to administer for businesses and Government.

Jersey’s low rate of GST on all goods and services, combined with generous personal income tax allowance and income-related benefits, keeps money in Islanders’ pockets and leaves spending choices to them. To balance the books and so maintain public services, lowering the GST rate on foodstuffs could mean raising the rate on other goods and services. Analysis undertaken by Treasury indicates that the GST rate on non-food goods and on services would need to be raised by roughly one percentage point (to 6%) to recover the revenue lost from removing GST on food.

While some Ministers have expressed support for the removal of GST from food, the Minister for Treasury and Resources believes that a broad-based system remains the fairest and most sustainable approach.

If the States Assembly chose to reduce GST on food, this would indiscriminately remove tax for all Islanders. If retailers pass on the saving to consumers, a GST cut would benefit all households, including higher-income households, making it a poorly targeted tax cut.

The Minister for Treasury and Resources believes that the best way to help lower-income households manage the cost of living is through direct support. The Government does this through programmes such as Income Support; the Community Costs Bonus (which, at £516.50, is the equivalent of the annual GST on a weekly food shop of £198); the personal tax allowance – which is also higher than many comparable countries; and, where simple and right to do so, by providing items such as menstrual products for free.

Jersey’s standard GST rate of 5% is the same or lower than the reduced value-added tax (VAT) rate that many other countries apply to foodstuffs. For example, France’s reduced rate on food is 5.5%, with most EU Member States applying rates that are higher (the EU average VAT rate on basic foodstuffs is 10%).

Evidence from targeted exemptions in other countries, most notably the UK, indicates that retailers do not always pass on reduced prices to the consumer. Given the wide variations in the prices of basic foodstuffs highlighted on the Jersey Consumer Council’s website, it is unlikely that removing GST from food in Jersey will lead to observable price reductions.

GST exemptions will create administration costs for businesses, particularly smaller businesses, which makes price reductions less probable. The Government would also face a material increase in administrative costs from operating a multi-rate GST regime.

For all of these reasons, the Minister for Treasury and Resources does not propose bringing forward legislation to remove GST from food.