Guernsey's States vote to step GST up to 4% then 5% and cap it at 5%
This change is proposed and is not law. The rules below describe what would change if it is adopted.
- Jurisdiction
- Guernsey
- Tax
- GST
- Change type
- Rate change
- Status
- Proposed
- Impact
- Watch
- Announced
- 2 October 2026
- Authority
- States of Guernsey (States of Deliberation)
- Systems
- ERP, Invoicing, Tax engine, POS, E-commerce
- Verified
- Fetched from official source · high confidence
Guernsey and Alderney businesses and residents affected by the planned GST, including Alderney Electricity Ltd and the Alderney Water Board.
No action — monitoring only. Track P&R's draft GST legislation and commencement date.
ERPInvoicingTax enginePOSE-commerce
On 2 October 2026 the States of Deliberation carried, 20 votes to 19 with 1 'ne vote pas', Proposition 1A (inserted by Amendment 55) to P.2026/49 'Tax Reform 2026'. It directs that the GST rate set in the package progress from the first-year rate to 4% from 24 months after implementation of the Income Tax/Social Security changes and GST introduction, and to 5% from 48 months after, with matching increases in the Essential Costs Relief Payment, allowances and benefits, and adds a Fiscal Policy Framework rule that GST shall not exceed 5%. Proposition 5 (carried 33-6-1) requires a published Fiscal Policy Panel assurance review before any increase from 3% to 4% or from 4% to 5% takes effect, and Proposition 6 (carried) bars any increase above the introductory rate before the section 12 assurance review is presented. Proposition 2 (carried) directs that the implementing legislation ensure Alderney Electricity Ltd and the Alderney Water Board incur no GST in supplying electricity, domestic heating fuel and potable water. These are States resolutions directing legislation to be drafted; no GST law has been made.
What changed in detail
These are States resolutions directing legislation to be drafted; no GST law has been made. On 2 October 2026 the States of Deliberation carried, 20 votes to 19 with 1 abstention, Proposition 1A (inserted by Amendment 55) to P.2026/49 ‘Tax Reform 2026’. It directs that the GST rate set in the package progress from the first-year rate to 4% from 24 months after implementation of the Income Tax and Social Security changes and the introduction of GST, and to 5% from 48 months after. The Essential Costs Relief Payment, allowances and benefits increase to match. It also adds a Fiscal Policy Framework rule that GST shall not exceed 5%.
Three further propositions were carried:
- Proposition 5 (33 to 6, 1 abstention) requires a published Fiscal Policy Panel assurance review before any increase from 3% to 4% or from 4% to 5% takes effect.
- Proposition 6 bars any increase above the introductory rate before the section 12 assurance review is presented.
- Proposition 2 directs that the implementing legislation ensure Alderney Electricity Ltd and the Alderney Water Board incur no GST on electricity, domestic heating fuel and potable water in carrying out their public functions.
This supplements gg-states-approve-gst-package-2026, which covered Propositions 1 and 1.1 and stated no escalation.
What it means
The headline GST rate in the package is a starting point, not a fixed rate: the resolutions set a path to 5%, with a hard cap. Businesses modelling the cost of GST should plan on 4% and 5% stages, each conditional on an assurance review.
Nothing is law yet. Track the Policy & Resources draft GST legislation and the commencement date before changing any systems.
Proof
to include within the Fiscal Policy Framework a fiscal rule that GST shall not exceed 5%
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