Govt warns against consumer fraud as businesses say its right to warn of post-treaty price increases

The Government claims there's misinformation circulating about the effect of the new transaction tax.

It says it may impose controls in order to prevent profiteering.

Number Six says it's aware some businesses have urged their customers to place orders before the 10th April target implementation date to avoid a 15% increase in price - calling this "tantamount to consumer fraud".

It says the new tax will not lead to a 15% increase in the retail price of a product, because it is levied on the cost price, which the business pays its supplier, and not the sales price, which a business sets for its customers.

The Government says it will monitor market conditions when the tax is implemented - leaving the option open to introduce controls to stop any profiteering.

The Government says in order to move into a goods and customs union with the EU Customs Union, Gibraltar will need to apply a new tax which will replace import duty.

It says this will be 15% in year one, 16% in year two, and will end at 17% in year 3 - which it says is currently the lowest in the EU.

Number Six says there will be a reduced rate of 5% on some products, and a zero rate on others - including food and non-alcoholic drinks.

The tax will not apply to services, only goods.