GUERNSEY will be going it alone if deputies today approve Policy Council proposals on zero-10.
The States will begin debate this morning on whether to commit to bring in corporation tax based on a general rate of 10%.
But with concerns raised that the island was committing itself too early – as some said it did in 2008 when zero-10 was first introduced – neither Jersey or the Isle of Man would say yesterday whether they were moving towards 10%.
The move away from a zero rate of corporation tax adopted by all the Crown Dependencies comes after pressure from the European Union.
Jersey’s Treasury minister Philip Ozouf (pictured) said it was not ready to quote a figure, despite the islands’ frequent pledges to work together with a united front on tax matters since it became clear zero-10 would not survive.
‘It is too early to name any rate for Jersey,’ said Senator Ozouf.
He added that if Guernsey politicians felt ready to put figures forward that was up to them.
‘It (10%) is one of the options we are looking at, but it is too early for us to rule anything in or out.’
He said Guernsey’s States worked in a different way to Jersey’s.
‘It is clear to me Guernsey’s chief minister and Policy Council need to seek sanction from the elected members in a way we maybe do not do.’
Each jurisdiction was going to have its communication with members in different ways, he said.
Senator Ozouf questioned how firmly the Policy Council was proposing the 10% rate.
‘It says in the Billet that the review will be run on the presumption of a 10% rate. I don’t think Guernsey has announced it is going for 10%.’
He gave an assurance that the islands were working closely together.
‘I have a very good relationship with Charles [Parkinson - Guernsey’s Treasury minister] and fully intend to do a lot of research together.’
A spokesman for the Isle of Man chief minister’s office said it could not answer in the time available whether it would be going for the 10% general corporation tax option.
Instead he provided a press statement released last week that confirmed that consultation on the future of the Isle of Man’s business tax system would start shortly as part of a review of international developments.
A Policy Council spokesman said that in Guernsey’s system of government, the chief minister and the council were not empowered to give any commitment without the States approval.
‘The chief minister advised his Jersey counterpart that there would need to be a States debate on this matter some 48 hours before States members met and were briefed on the issue,’ he said.
Deputy Sam Maindonald will lead those opposed to committing so early on the 10% rate of corporation tax by trying to amend the council’s plans.
She said that making a commitment at this time would damage the finance community, especially as neither Jersey or the Isle of Man have made known any similar presumption.
Article posted on 27th October, 2009 - 2.30pm
8 Article Comments
I’d be more worried about the rates charged in Luxembourg and Switzerland. If they become comparable with the Channel Islands, why would a bank need offices in Guernsey, Jersey or Isle of Man ?
They’d just shut them all and operate out of one main office on the continent.
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The Policy Council absolutely must not approve this until we know what Jersey and the Isle of man are doing.
Jersey / IOM could turn around and set their own rates of – say – 7.5% and kybosh our competitiveness at a stroke.
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This will not be approved by the PC, it can only be approved by the States of Deliberation and the Billet made it clear that is was a presumption that it might be 10% as you say it could be lower, we will need to have a level playing field before we commit.
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Regardless of whatever tax system is introduced, we will never get our house in order, until we have got our house in order – deputies don’t seem to realise that expenditure should only be for essentials! Additionally, REAL staff numbers, including those hidden under “contract employees” and “consultants”, should be returned to the gradings and levels of 16 years ago as per the ZERO growth policy which seems to have been forgotten and swept under the carpet!
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Harry
We have just spent 4 days discussing nothing but expenditure on essentials and I would be interested to see what your list of essentials would look like. The Zero growth policy was scrapped some time ago by the States for a more rigid system of department budgets if you don’t have the money you can’t have the staff. T&R have to sanction all new posts that come from the centre after consulting with HR we have also shed a huge number of staff over the last few years through retirements not being replaced and redundancies.
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CD says “Jersey / IOM could turn around and set their own rates of – say – 7.5% and kybosh our competitiveness at a stroke”
CD Its time to have more faith in your own island. Guernsey has far more to offer in the competitiveness stakes than just the rate of tax.
Your comment is similar to those of the doomsday boys who scared the politicians into going down the one way, blind alley of Zero 10.
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I am glad Dave Jones has said they will not, set a tax rate until they have agreed with Jersey and I.of Mann. It would be very stupid to do other wise.
Also because of the short fall in income now and possibly even more in the years to come.
I believe that all States Dept, should be told to cut back by at leased 15%, if not more.
I know that there will be howls of protest, from Ministers on how efficient there individual dept. are.
It must be said that, certainly when you deal with these, you find that most of them are overstaffed, overpaid and find the longest and most costly way to do things.
Just a personal view, a few taxpayers may agree with, but l wonder how many Deputys?
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Edquet MUST say
“…. certainly when you deal with these [States Depts}, you find that most of them are overstaffed, overpaid and find the longest and most costly way to do things.”
Do you? Or is that opinion based on something you heard? My experience is a lack of staff with enough time and experience, and a sense of cutting corners to please the type of people that would never deal with a States dept. that would require essential service, yet share this opinion of over capacity, for political expediency.
No one is under any illusion that basic States operational procedures are a hodge-podge of bespoke systems and uncooperative duplicated functions, the hope of freeing the wasted cash and providing a more streamlined experience will surely not be in (much) vain?
But that’s entirely different in wanting drastic cuts out of spite because you think that the public sector is a waste of space. Fact is, you’re solution would wreak havoc on our fragile society. Too many people are on too precarious an edge to be mucking about with reductions in services. Cut back when the fruits of ‘trickle down’ from the last 40 years of untrammeled local prosperity, suddenly and miraculously ripen as was, and is still – amazingly – promised, sincerely, and repeatedly. We’ll all be rich enough not to create extra state burden.
Nobody is forcing us to tax anything any differently. It is only an example of where general revenue can be raised from and an advice that due to a SPECIFIC banking failure with large local human cost, and no political will to understand the social ramifications, we can only be accepted as ‘a player’ if we are able to offer a working and fair DPS for the ordinary savers under the illusion of opening a savings account rather than investing in Private Equity greed.
Dave Jones is showing the arrogance that allows us to accept Lyndon Trott’s blatant misinformation about our tax regime, and for the public to seem to think that a collapsed bank is part of life and it’s no one’s responsibility.
We really need to get with the real world sometime soon.
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