IT WAS quite a mouthful, but the 130 or so words that the chief minister used in the States yesterday indicated just how much is at stake over the renegotiation of the offshore islands’ zero-10 tax regimes.
The key to success is retaining the existing right to territorial taxation, in other words applying whatever rate of corporation tax emerges to profits made solely in Guernsey and not to worldwide profits made by a company resident here.
Establishing that right is central to the future of the funds and fiduciary sectors and, possibly to a lesser extent, the banking and captive industries here.
How difficult will it be? As the chief minister said: ‘We are not miracle workers’, which provides a hint of the complexity of the situation, but at least Guernsey will be united in its efforts with Jersey and the Isle of Man. Until that is secured, it will not realistically be possible to calculate how much business the current uncertainty has lost or, indeed, how much a new system might win.
The other sensitive aspect of the debate revealed in the 130 words was the value of personal contacts at a high level.
As the chief minister put it, the Policy Council will be pressing to be able to put its case in person to the EU Code of Conduct group that effectively adjudicates on what is unfair tax competition.
And islanders should be under no illusion that that is potentially of mission-critical importance. It is one thing for UK officials to say, as they have a constitutional duty to do, ‘that is what the Crown Dependencies have asked us to request’ and quite another for panel members or their officials to hear a full presentation from those intimately involved and who can argue the centuries of tradition securing local rights.
One of the unfortunate – or perhaps narrow-minded – aspects of the current efforts to safeguard Guernsey’s future prosperity is the jeering at the chief minister’s ‘globe Trotting’. Anyone involved in business or in influencing outcomes knows there is no substitute for personal contact and proper relationships.
This is no time for playground politics. What’s needed is a team approach focused on winning the result all Guernsey needs.
The globe Trotting is necessary
IT WAS quite a mouthful, but the 130 or so words that the chief minister used in the States yesterday indicated just how much is at stake over the renegotiation of the offshore islands’ zero-10 tax regimes.
The key to success is retaining the existing right to territorial taxation, in other words applying whatever rate of corporation tax emerges to profits made solely in Guernsey and not to worldwide profits made by a company resident here.
Establishing that right is central to the future of the funds and fiduciary sectors and, possibly to a lesser extent, the banking and captive industries here.
How difficult will it be? As the chief minister said: ‘We are not miracle workers’, which provides a hint of the complexity of the situation, but at least Guernsey will be united in its efforts with Jersey and the Isle of Man. Until that is secured, it will not realistically be possible to calculate how much business the current uncertainty has lost or, indeed, how much a new system might win.
The other sensitive aspect of the debate revealed in the 130 words was the value of personal contacts at a high level.
As the chief minister put it, the Policy Council will be pressing to be able to put its case in person to the EU Code of Conduct group that effectively adjudicates on what is unfair tax competition.
And islanders should be under no illusion that that is potentially of mission-critical importance. It is one thing for UK officials to say, as they have a constitutional duty to do, ‘that is what the Crown Dependencies have asked us to request’ and quite another for panel members or their officials to hear a full presentation from those intimately involved and who can argue the centuries of tradition securing local rights.
One of the unfortunate – or perhaps narrow-minded – aspects of the current efforts to safeguard Guernsey’s future prosperity is the jeering at the chief minister’s ‘globe Trotting’. Anyone involved in business or in influencing outcomes knows there is no substitute for personal contact and proper relationships.
This is no time for playground politics. What’s needed is a team approach focused on winning the result all Guernsey needs.
Article posted on 28th October, 2009 - 2.39pm