Sean Power Manifesto

[Sean Power]

Hi,

I did say: "At the moment, we have an unwelcome tax. However, it would be more unwelcome if a demand for exemptions gave leverage to a future Treasury Minister to raise the base rate".

I do not want any excuse to hire more Treasury officials. Exemptions will do that.  If we have to have this tax, let us see how it operates in it's most simple form.

Remember, I voted against it!

Sean

[jez strickland]

Hi,

I did say: "At the moment, we have an unwelcome tax. However, it would be more unwelcome if a demand for exemptions gave leverage to a future Treasury Minister to raise the base rate".

I do not want any excuse to hire more Treasury officials. Exemptions will do that.  If we have to have this tax, let us see how it operates in it's most simple form.

Remember, I voted against it!

Sean

Sean,

1) Why is GST an "unwelcome tax"? What is your reasoning that leads you to this conclusion?

2) Why would exemptions lead the Treasury Minister "to raise the base rate"?

3) Why would this (2) lead to the hiring of "more Treasury officials"? Where is your evidence?

Don't be shy...

[Sean Power]

Jez,

GST is an indirect tax. Islanders prefer direct taxation. It came in at the same time as a huge amount of global instability.

Exemptions would cause Treasury to need more staff. Look at the UK VAT codes. It is an administrative nightmare. Look at yogurt and the classic Jaffa cake argument.

Treaury says it needs to bring in a minimum £45 million pa.  By bringing in exemptions, costs increase and revenue drops.

I cannot understand why, now that we have this tax, people just cannot leave it alone. Stop tinkering with the damn thing and let it bed in so that we can all see how effective it is !

Sean

[Mark Forskitt]

Re GST, I can't help but note that the UK govt is reducing VAT (=GST) from 17.5% to 15%.  All to help stimulate the economy of course. So why would it not help stimulate our local economy to reduce our GST by an equivalent amount, say 3%   

[tonytheprof]

Sorry Sean,

I cannot see that taking GST of domestic heating and lighting would be a "bureaucratic nightmare". These are readily identified, and have relatively few suppliers in the Island. It would be simple to make them zero rated.

Given that JEC is putting up prices by 25%, this would help matters significantly, especially for the elderley, who may have to be choosing between warmth and food. Ask Help the Aged, if you want proof.

I can see your case against fuel, but not in total. I think you are bringing up a nightmare of complexity as a "straw man" where it does not cover all situations.

[The Rev Peter Sarkey]

Re GST, I can't help but note that the UK govt is reducing VAT (=GST) from 17.5% to 15%.  All to help stimulate the economy of course. So why would it not help stimulate our local economy to reduce our GST by an equivalent amount, say 3%   

The reason Mark my friend is that it is something which makes sense. You know as well as I do that anything that makes sense has no chance of a pulse in the House of Walker.

[jez strickland]

Mark, my thoughts exactly. Wasn't it Keynes who suggested spending was the way to climb out of the depression?

If VAT/GST is lowered surely more spending power for consumers?

As the UK VAT has been lowered from 17.5% to 15% does this affect our fullfillment industry? I am aware that there is a de minimis level of £18 and anything over that figure is subject to duty as it becomes economically viable for UK Customs to collect the duty.
Now the rate has dropped does it follow that the de minimis level rises due to the cost of collecting duty based on 15%, and not 17.5%?

[Sean Power]

Hi Jez,

I have no problem with lowering the % rate, or getting rid of the ing completely.  I have a problem with the tinkering or exemptions in any way or form.  That is a cost option and that is simply not an option for me.

Sean

[tonytheprof]

Sean,

I cannot see the "cost option" on domestic energy.

Llet's look at it from an accounting point of view (which I have to often enough advising clients)

For instance, the JEC identifies domestic customers and commercial ones. It excludes domestic ones (or makes them zero rated). A one off cost to implement on their computer systems (most systems allow global changes of default VAT class to selected clients, so it is not that complicated).

Domestic fuel - again oil for central heating is easily identified by the supplier into home/commercial. They do it already internally even if not for GST.

Domestic gas - gas is again easily identified by the supplier into home/commercial.

If the import of the goods (oil/ elecrecity/gas) is treated (as it must surely be) as "approved trader status", the only charge is the one made not by customs but by the end user. If an end user is exempt (as happens with at least one business I know), no charge is made.

Cost to states of administration: none extra.

Where is the cost to the States in terms of extra people needed to manage anything?

The GST forms still get entered up by these companies, the GST remitted (albeit some less) than before. GST forms already deal with businesses which have some zero rated customers. No extra complication needed there.

Cost to states in terms of extra manpower - none.

Not much cost to the company either once in place - a one off change.

So, I'm sorry, I must be thick, but I can't see what on earth you are on about with this "cost option"?

[tonytheprof]

The use of Jaffa cakes as evidence of complications seems a classic case of "false dilemma" to rule out all exemptions.

This fallacy occures when two alternatives are presented, which are often, though not always, two extreme points on some spectrum of possibilities.

This can lend credence to the larger argument by giving the impression that the options are mutually exclusive, even though they need not be, as in this case.

[John de la Haye]

Deputy Power,

As someone who voted for you, I am still uncertain about the need for GST, especially with the UK government relaxing the rate of VAT.

Do you think that that GST was a little premature in the absence of States cutbacks which may now be forced on our Government?

John