THE Treasury and Resources Department is facing 18 months of work to introduce a zero-10 system of corporate tax by 2008. The States yesterday agreed every proposal in the Policy Council’s package of measures, with just two amendments.

Chief Minister Laurie Morgan said that he was happy and relieved at the outcome.

Treasury minister Lyndon Trott said the decision sent out a strong message to the business community.

‘The really important issue is that the drivers within our economy, not just the finance industry, now have the security that they need.

‘The basic rate of corporate tax will be 0%. We will not have a payroll tax and the strong message is that we are pro-business and not anti-business. In return, business will be pro-Bailiwick of Guernsey and not anti.’

Tax changes should start happening from September, when the Social Security Department presents its annual uprating report.

The 2007 Budget in December should include proposals for increases in tax on real property.

The report on setting up the machinery to allow a general sales tax will be presented to the House during 2007.

The final package of increases, primarily in indirect taxation, will go before the States at the end of next year.

Most opposition to the proposals melted away during the day, especially when Deputy Morgan confirmed that the package would be subject to tweaking in the future.

‘The support at the end of the day was superb,’ he said.

‘This is a good day for Guernsey. We want to maintain our place in the world and maintain our standard of living and our people want to be good international players.’

The only serious objection came from Deputy Dan Le Cheminant.

The Father of the House said he would vote against the whole package because he did not believe that the island needed to change.

* The successful amendments came from Deputy Peter Roffey, who got the States to agree to lift the employers’ social security contribution to a new ceiling of £100,000, and Deputy Chris Brock, who urged the States to pursue a multi-directional business development strategy rather than rely on the finance sector.