The GSD have called for the Government to clarify the Chief Minister’s recent tweet on Import Duty and VAT.

A statement from the GSD follows below:

In response to a GBC report as to the cost implications of the introduction of VAT, the Chief Minister  yesterday tweeted that ‘ States that levy VAT do not levy import duty’ and also called it a purely speculative  piece. The GSD considers that any examination of the implications of the customs union is valid and deserving  of public attention and any independent professional analysis is to be welcomed.  

Roy Clinton the GSD Shadow Minister for Public Finance stated:  

“The Chief Minister needs to clarify his tweet that ‘States that levy VAT do not levy import duty’ as this is  simplistic to say the least. The UK has always levied customs duty prior to the calculation and addition of  import VAT.  

The EU external tariff would require duty to be levied on non-EU products prior to the addition of import  VAT, so to blithely suggest that somehow VAT would replace and not be in addition to any customs duty is  to play with words. VAT is always an additional tax payable by the consumer over and above any applicable  duties. The current practice of reclaiming IVA at the frontier would no doubt cease to be possible if Gibraltar  joins the EU customs union however bespoke. To those who suggest that Gibraltar will always have a  competitive edge is to ignore the tenants of the EU level playing field and the Single Market.  

This is a complex area and again I call on the Chief Minister to release any technical advice he may have  received. Is the customs union really only a maybe, when he so vehemently and defensively attacks any valid  analysis of the cost implications to Gibraltarians?”