IN TRYING to analyse the impact of the Foot report into the British offshore financial centres, a good guide is the response to it from Tax Research UK, which is the forum for the persistent low-tax critic Richard Murphy.
He instantly dismissed it as a weak report from a weak man, a proper insider’s job. What that meant, of course, is Foot did not go as far or be as damaging as Mr Murphy wanted.
Locally, the reaction has been far more upbeat, with the chief minister applauding it as a positive endorsement.
The Crown Dependencies are setting the benchmarks in good standards and it is clear from the report and the additional work by Deloitte that any alleged harm caused by so-called tax havens is less than popularly supposed and Guernsey makes an exceptionally strong cash contribution to the UK.
It is not, however, all happy reading.
A strong undercurrent, reinforced by Deloitte, is that the tax competition provided by areas like the Channel Islands is not welcomed. As the EU, in particular, strives to harmonise rates – effectively to drive out competition – so the non-harmonised jurisdictions stick out and become more of a target.
And it is that political backdrop that made Deloitte state that there was a compelling case for Guernsey to introduce VAT. Why? The EU states and Britain have penal rates of tax because politicians have failed to control costs or even spend the money they raise wisely. The last thing Guernsey’s deputies need – bearing in mind the finding by consultants Tribal that a profligate culture exists here – is more of islanders’ money to spend.
Nevertheless, the thrust of the Foot report is there: the offshore islands are out of step and need to join the march towards ever-higher taxes.
Also concerning is the suggestion that Guernsey should be told by Britain what acceptable tax rates here might be and the insistence that ways be found to find alternative taxation sources to reduce the dependence on finance-related revenues.
There might not be anything bad about Guernsey in the Foot report – but its message couldn’t be clearer.
Article posted on 30th October, 2009 - 3.38pm
8 Article Comments
What the Press needs to appreciate is that whilst “Locally, the reaction has been far more upbeat, with the chief minister applauding it as a positive endorsement” that is from the perspective of a tax haven (as described by Michael Foot)
Others who pay more taxes to make up for the taxes avoided (legally) in tax havens will see things in a very different light.
If Guernsey were to accept that there is another side to the story, and that everything does not resolve around the needs of Guernsey, it might well have an easier ride considering that most of the business conducted in Guernsey is transparent, as we have been told time and time again by posters to this forum.
Time perhaps to be rid of the what is often seen outside as a perceived arrogant disregard for others, and assuming that what Guernsey does is always right.
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Stephen John
You seem to have a lot to say about what taxes Guernsey residents should pay.
Er…don’t you live in the Isle of Wight ?
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Stephen
Of course from our point of view, everything does revolve around the needs of Guernsey. What would you expect? That’s what our job is as a government, to make sure the needs of the people of Guernsey are met, we are doing nothing illegal and trading perfectly legitimately in the financial markets, We have low taxes because that’s what suits our economy and we don’t ask for anything from anyone else. Of course if other countries wanted their economies to flourish as our has done over the years then all they need to do it adopt the same principles as us then I suspect we might be in trouble.
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Hector
Try getting your facts right.
I have never suggested Guernsey residents pay more taxes.
From the earliest days of Zero 10, and to this day I have argued if the unfairness of Guernsey residents having to pay more taxes, both obvious and stealth, for the benefit of those who are mainly non residents.
Please get your facts right before firing off your comments and trying to score points. It’s not that hard.
So yes, I do say a lot about Guernsey taxes, but always that Guernsey residents have been left with increased tax bills so that non residents pay less tax.
I plead guilty to that.
.
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Dave Jones
I am not having a pop at you in the slightest. If the rest of the elected were as forth coming as you I am very sure that the island would be a much better place and the people more informed.
I just don’t think that the way the Landsbanki depositors have been treated many would agree their needs were ever met or barely considered given the lack of regualtion and accountability towards trust and their savings.
More needs to be done by somebody rather than a wash the hands n wait for it to go away job!
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Yea no need for vat or gst when you can up States House rents 6%.
Brutal when we are in deflation.
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Stephen
I don’t recall ever suggesting that you did say that Guernsey residents should pay more taxes ! Where did I say that ? I don’t think its me who needs to get my facts right.
And talking about facts – do you or do you not live in the Isle of Wight ? Its relevant to my observation on your views about Guernsey residents and how much tax they pay. You seem to have overlooked that question and answered others which werenot asked.
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Hector
I was giving you the benefit of the doubt and assuming you had made a mistake.
For your information I am a Guernsey taxpayer, and certainly don’t need your approval before making the point that the Guernsey taxpayer is being made to pay so that a many off islanders pay less taxes.
Unlike you, I have the courage to support my views with my real name, and it is no secret where I live. That is well known to most people and has appeared in the Press on numerous occasions. But. you already know that.
So what is your problem with a Guernsey taxpayer living outside of the island, being concerned about the excessive levels of tax paid by the ordinary Guernsey taxpayer?
Perhaps you will let us know your full name as you clearly want personal information from me. Are you man enough to provide your full name and address?
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