Government reports treaty retail boost as GSD questions claims

The Government of Gibraltar said local traders are reporting a sharp increase in sales since the treaty came into effect on July 15, while the GSD has challenged it to publish the evidence underpinning those claims.

The Government said a number of businesses had reported euro-denominated sales rising by more than 240% compared with the two weeks before July 15, and by more than 150% against the same period last year.

It said the figures pointed to increased spending by visitors following the removal of formal immigration controls at the land frontier, with transactions in euros providing a clear indication that more visitors were shopping in Gibraltar.

The Government also said the increase in activity had generated an estimated £800,000 in Transaction Tax and £975,000 in Import Duty on goods imported into Gibraltar since July 15.

It said those figures were expected to rise further over the coming weeks.

According to the Government, many businesses had built up stock before the treaty came into force after taking advantage of a guarantee that goods dispatched before July 15 would continue to benefit from the previous duty arrangements.

As a result, it said fewer goods vehicles had arrived in Gibraltar in recent weeks, with volumes currently around two-thirds of normal levels.

The Government said retailers were expected to begin replenishing stock during August and September, which it anticipated would lead to higher Transaction Tax receipts.

Chief Minister Fabian Picardo said the early figures suggested the treaty was already delivering economic benefits.

“These are very encouraging early indications of the positive impact the Treaty is already having on Gibraltar’s economy,” Mr Picardo said.

“We are hearing directly from traders that more visitors are coming into Gibraltar and, importantly, that they are spending money in our shops, restaurants and businesses.”

“While it is still early days, the initial signs are extremely positive.”

“As businesses begin to replenish their stock over the coming weeks, and teething problems are a thing of the past, we expect to see the full fiscal benefits become even clearer.”

“This is exactly the type of economic activity and shared prosperity that the Treaty was designed to deliver."

The GSD, however, questioned whether the Government's statement reflected the wider experience of Gibraltar's retail sector.

The Opposition said anecdotal evidence from retailers suggested many businesses had yet to see any meaningful increase in customer numbers or year-on-year sales.

It called on the Government to publish the data behind its claims, including how many businesses had been consulted, which sectors they represented and whether the examples cited reflected the broader picture.

The GSD also questioned the significance of higher Transaction Tax receipts, noting that the new system had replaced the previous import duty structure of zero, three, six and 12%, with a flat 15% rate.

The party said that higher tax receipts alone did not necessarily demonstrate increased sales volumes or stronger economic activity.

Craig Sacarello, the Shadow Minister for Business, said: “Rather than relying on what could be selective figures in an effort to promote optimistic headlines, the Government should publish the full evidence on which its statement has been made.”

“This way, traders and the public can properly judge whether the benefits being claimed are genuinely being felt across Gibraltar's retail sector and are not solely based on Government spin, so we can all share in the Government’s optimism.”