Policy and Resources' package to raise revenue but ease the burden on the less well-off is passed after six days of debate.
Guernsey was one of the few places in Western Europe not to have VAT, or what is known locally as GST, a goods and services tax.
But that will change, with the island's parliament agreeing to a 3% GST rate from 2029.
This will be coupled with benefits for the less well-off, such as changes to tax-free income allowances.
Debate began in the July heatwave, but with the sheer number of amendments laid against the policy letter, that three-day meeting was deferred until 30 September.
In the days before the meeting, another raft of amendments were laid, and a veteran, but no longer current deputy, told Island FM the workload looked impossible.
However, deputies agreed to limit speeches to five minutes, or seven minutes when introducing an amendment or summing up.
This quickened the pace of debate, and the number of amendments began to erode.
Around 5.40 today (2 October), 22 politicians voted in favour of Policy and Resources' tax package, and 17 voted against.
There had been a strong anti-GST movement, with campaigners confronting deputies on the steps of the Royal Court and handing over a 9,000-signature petition earlier this week.
There was also growing pressure from local industry groups to make a decision to give businesses certainty and to move forward with putting the Bailiwick's finances on a better footing.
An early attempt to stop this week's debate failed, as did another amendment calling for a referendum on GST. A move to increase income tax also fell.
The amendments that passed included Future Guernsey's proposal to increase GST to 5% over time and use the extra income to stop the brain drain of young professionals leaving Guernsey by offering them incentives or tax breaks to stay.
Latest figures suggest GST at 3% will generate £36 million a year for the public purse, though this is £3 million less than previously estimated.
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