The Guernsey Retail Group is urging politicians to rethink the threshold for GST exemptions on online purchases.
Guernsey's States agreed to introduce a Goods and Services Tax (GST) in 2029 during debate last week (2 October).
The decision was controversial, with many concerned it could worsen the already high cost of living.
The Guernsey Retail Group (GRG) is now urging politicians to 'urgently reconsider' a planned threshold for collecting the tax on imported goods.
It would mean shoppers who buy items online from off-island retailers that cost less than £280 won't pay the 3% charge when their package arrives in the island.
GRG Director Martin Search says, at £280, the proposed 'de minimus' puts local shops at a huge disadvantage.
"You have to have a level playing field.
"Putting £280 de minimus on imports would mean that all shops are paying 3 or 5% - or whatever it's going to be - within the shops, and most sales are under £280.
"So what it means is you're not paying (GST) on the internet and you're paying (GST) on the island, so that is going to push everybody to internet sales, and unfortunately you're going to see lots of (shop) closures."
"It's a major, major problem."
The GRG says, now that a decision on GST has been made, the focus must shift to protecting businesses, trade, jobs and livelihoods.
When Jersey introduced GST in 2008, the de minimus was set at £400 to ease the burden and admin on Customs of collecting the tax on low value items.
When GST was raised to 5% in 2011, the de minimus was lowered to £240 and remained at that rate for more than a decade.
The Jersey Chamber of Commerce continues to push the government for a lower threshold, making the same argument about there not being a level playing field for them to compete with online shopping.
It was further reduced in 2020, during the Covid-19 pandemic, to £135, and then again in 2023 to the current level of £60.
This coincide with a move Jersey's government for major online retailers including Amazon to collect GST on behalf of the Treasury at the point of sale.
It means shoppers in Jersey mostly pay the extra 5% when they place their online orders, and where they purchase from a smaller online retailer, they declare to Customs and pay the tax on purchases over £60.
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