TREASURY AND RESOURCES MINISTER
Goods and Services Tax (Jersey) Law 200- COMMENTARY ON Amendments
1. Purpose of Report
The purpose of this Report is to gain Ministerial approval for the lodging of
a Commentary on Amendments to the Goods and Services Tax (Jersey) Law 200-.
2. Background
The States Assembly agreed on 13th May 2005 (P.44/2005) to introduce a broad-based, 3% Goods and Services Tax (GST) as from 2008. In the light of this decision, and following extensive consultation during 2006 with the business community and the wider public, law drafting on the above law has now concluded and the final draft of the law was lodged au Greffe for debate by the Assembly on 17th April 2007. The Corporate Affairs Scrutiny Panel lodged Amendments to the GST Law on 3rd April 2007
3. Responding to the Amendments
Following detailed analysis of the proposed Amendments to the Law a Commentary is given in Annex A.
4. Recommendation
That the Minister approves the lodging au Greffe of the Commentary on Amendments to the Goods and Services Tax (Jersey) Law 200- outlined above and agrees to direct the Deputy Treasurer to make the necessary changes and lodge the Commentary to the Amendments au Greffe.
States Treasury For Ministerial Decision meeting on 12th April 2007
Annex A
COMMENTS OF THE TREASURY AND RESOURCES MINISTER ON AMENDMENTS TO P.37 (GOODS AND SERVICES TAX : DRAFT LAW) LODGED BY THE CORPORATE SERVICES SCRUTINY PANEL
The Panel has raised a number of issues, and the Treasury and Resources Minister has the following brief comments to make on each of them:
Article 8 : remove the three year restriction on an increase in rate.
The Minister opposes this amendment on the basis that he has given an undertaking to the States and to the public, and wishes to honour that commitment. To vary the commitment might also suggest that the States was simply anxious to have a more positive cash flow and was less concerned about constraining growth in expenditure.
Article 41 :
The Minister is prepared to accept the views of the Corporate Affairs Scrutiny Panel
Article 51 : property conversions
Whilst originally it was planned that all building works, including repairs and maintenance, might be zero rated for GST, the prevailing view of States Members when the matter was discussed last Autumn was that to exclude repairs and maintenance was taking a step too far.
The Law as currently drafted is specific as to its scope, but the amendment as currently drafted would lead to anomalies between building contractors and DIY conversions, and it would also be necessary to amend Schedule 6(2)(4). However the difficulty in trying to determine when a ‘conversion’ is actually akin to a ‘new build ‘ could give rise to considerable problems and appeals. If Members feel that certain conversions or building extensions should qualify, then there might need to be a link to ‘an additional unit of accommodation’ as defined in Housing Regulations.
The current amendment is accordingly rejected.
Articles 88, 89 and 92 :
The Minister is prepared to accept the views of the Corporate Affairs Scrutiny Panel
Schedule 8, Para 7
Although the heading of this paragraph may suggest heavy-handed connotations, the intention behind it is simply to ensure that audit visits to a place of business can take place, and that the business proprietor cannot unreasonably deny entry.
Contrary to the assertions of the Scrutiny Panel, this legislation mirrors the situation on Singapore, as well as that pertaining elsewhere in the world. The extract quoted from Singapore relates to the Singapore Customs Act, but their Singapore GST Act (Art.84(1)(a) gives powers similar to those proposed in the draft law.
The Minister accordingly cannot accept the amendment.