Corporate Services - GST Review - Approved Sub-Panel Minutes - 6 June 2006

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Agenda matter

Action

1.

Minutes

The Minutes of the meeting held on 12th May 2006 were approved as a true record

2.

Discussion

The Sub Panel received a briefing note from the adviser and discussed the following issues -

1. Exclusions: it was agreed that the Treasury's argument for a simple, broad-based tax with few exclusions needed to be carefully scrutinised. In particular, it was necessary to examine the impact of GST on the lower paid and the elderly if zero-rating is not applied to basic foodstuffs and medical supplies/services.

The Sub Panel received a note prepared by Crown Agents regarding their estimation of the effect of excluding certain items from the GST base. It was noted that the Housing Expenditure Survey, which was due to be published by the Statistics Unit in July, would be used to validate the figures used in this estimation.

It was also noted that Senators Syvret and Shenton were preparing an amendment to the GST law on this issue.

2. General rate of GST (article 8) The Sub Panel was advised that there was no practical difference between placing the GST rate in the primary law or in regulations since this was a taxation law and thus would not have to be vetted by the Privy Council. It was accepted that clause (4), which guaranteed the rate for the first three years, was a political decision. The clause could, in theory be deleted by the States if this was considered necessary before three years had elapsed.

3. Alternatives to GST - Although it was recognised that the States had decided to opt for GST, Constable Murphy requested that the alternative of a simple retail tax, as operated in the USA, should at least be investigated.
4. Treatment of commissions on international boat sales - Constable Jackson raised queries on this issue. It was agreed to request clarification from the Treasury.