Island ‘safe from G20 blacklisting’
Thursday 2nd April 2009, 2:30PM BST.
GUERNSEY will not be on any blacklist created at today’s G20 summit if the UK gets its way, the Guernsey Press can reveal.
Government sources yesterday told how Guernsey’s recent progress in signing tax information exchange agreements had been welcomed – even going as far as saying that the island was ‘setting an example’ to other jurisdictions.
A source close to the government confirmed that the UK followed the Organisation for Economic Cooperation and Development benchmark when judging whether a jurisdiction was being cooperative on tax matters.
The OECD states that a financial centre must have signed at least 12 tax information exchange agreements to be deemed cooperative.
Guernsey has, as of last week, signed 13 and our source said the OECD benchmark was internationally accepted.
‘We do welcome that countries are taking those steps,’ he said.
‘Guernsey is obviously setting an example by going beyond the 12 agreements. Guernsey has showed real progress and the UK Government, and other governments, want it to sign more but it has definitely been a step in the right direction.
‘Countries that are not at that level yet are having pressure put on them to get to that level. Guernsey is clearly one of those places that’s proving it is willing to do that.’
- To read Guernsey Press stories in full click here for subscription details. Individual editions are now available online.
Campaigns
Voice For Victims
Voice for Victims is a campaign aimed at promoting the rights of those affected by child sexual abuse.
This is Guernsey
Guernsey Press
A spoonful of sugar makes the medicine go down—-
Report abuse
This is the saddest news I’ve heard all day…
Report abuse
Shill
are you sad that we’ve signd the agreements or sad that we are not going to be blacklisted.
There are a number of people posting on this website that they hope guernsey gets blacklisted.
I’m pretty sure they either don’t live here, havent thought it through properly, are completely stupid or want guernsey to be ruined. I’m hoping your not one of these people.
Whilst chatting to friends recently i went through a list of about 40 mutual firends and family members and of those 40 we calculated that if guernsey was blacklisted only 8 of them would still have work when it came into affect.
guernsey woudl be destroyed financially if 80% of people were suddenly made unemployed especially in the current economic situation where moving to the mainland or further a field would provide a guarantee of finding work.
And it’s not just finance workers we would be affected. How many tradesmen woudl be abel to find enough customers with the finance money gone. Who would the freight industry ship things for if the companies are gone and the people hove no money to shop on amazon. I can’t imagine new cars would be on the shopping list or much else indeed.
It’s a pessemistic vision of the future but not an entirely impossible one.
Report abuse
Who cares- why shouldnt we offer investors/businesses low taxes at least we dont invade other peoples countries.
Report abuse
The funny part of all this Tax Haven commotion is that one of the countries pushing very hard is The Netherlands. What alot of people don’t know is that alot of big entertainers i.e. Rolling Stones and many others have foundations based in the Netherlands that are registered owners of their music rights. This is because there is only a 7% tax rate on this type of foundation there. Nice little pot I would also like 7% of an estimated 3 billion, rather than 65% of 3 million.
Report abuse
J
I am not sad that we’re not going to be blacklisted. I am certainly not against the entirety of the finance industry, and agree with you that our economy is wholly dependent on it. My own job, whilst not based in the industry, could very well disappear if the industry left.
What makes me sad is that being giving the seal of approval will probably make the finance industry grow even further, when it is already stretching this island’s resources to its limits. I was hoping that there would be enough condemnation from the world’s governments to cause a controlled shrinkage of the industry and to relieve the pressure a bit – perhaps force the island into increasing the number of industries it supports (not a sudden disappearance of all the finance companies that we currently rely on). Now, we may well see an increase in the number of jobs, which will lead to population increase, and an increase in things like houses and cars on the island. To me it seems simple – the more people you crowd on to an island, the worse the quality of life for everyone.
On a related point, I know a lot of people will point to all the shiny cars on the road, and to their vast DVD collections and eating out every lunch time as a sign of success, but I just don’t see it that way. My personal experience is that even in my lifetime (I’m 25) people have less time outside their jobs and seem so much unhappier. The finance industry has enabled this way of life and that is why I am ambivalent about its success here in my home.
Report abuse
Well said, Shill
Report abuse
Shill – I’d agree with you about the measure of success but the busy life that you speak of is not just here. In fact, life here is utopia in that respect compared to life in the UK. It is just a sad fact of the modern world, not the fault of the local finance industry. The way I see it, Guernsey can (and largely does) harness the finance industry in order to get many of the benefits of the modern world while still doing a reasonable job at maintaining what is great about this island. Without the finance industry we would be like Cornwall – beautiful scenery but impoverished communities.
As for the blacklisting, I suspected all along that it was just political positioning and looking for an easy scapegoat. No-one has actually bothered to define what a tax haven is and no-one has put forward any substantive ideas about how to sanction them if sanctions are to be applied. It was an easy soundbite and now the G20 is taking the credit for forcing various jurisdictions to sign tax information exchange agreements, as if it was their idea. TIEAs have been in existence and in the pipeline for years due to pressure from the OECD and I am pleased that we have been at the forefront of signing up to them. The G20 politicians look like they have achieved something, and tax havens look like they have cleaned up their act. That may be true for genuinely secretive jurisdictions like Liechstentein & Switzerland, but our position hasn’t changed much.
Interesting that few of the press and none of the politicians (least of all Obama) mentions Delaware among the possible tax havens…
Report abuse
Andy
That is not the crux of the argument. We should, quite rightly, be able to set whatever tax structures we like. What we shouldn’t be allowed to do is then try and hide the business passing through the shells in our jurisdiction. We should be pass on the information that x or y is using a or b structure so that the true source and beneficiary can be taxed appropriately according to their home domiciles.
This will be countered by the usual – ‘well if they incorporate in Guernsey then they follow the rules’ – true, but then the rules that allow ‘gateway’ companies specifically designed to move capital through loopholes need to be tightened.
The whole idea is to create a level playing field where the likes of the Big Business with all their clout are on an even tax and business law footing as your Fred in the sheds.
The idea that the rich and powerful get all the breaks is so engrained in us plebs that we have forgotten what ‘fair’ actually means.
Shill
I completely agree. I would add that it would be in our own interests for our regulator to actively seek out any business (they don’t at the moment; they ‘tick the boxes’ that clears them of responsibility) that may tarnish the ‘Guernsey brand’, name and shame them so they can’t move elsewhere without the elsewhere looking dodgy, and then maybe we can have Mr Trott declaring, as he does trumpet-like, ‘peace in our time’ whilst shaking a TIEA agreement.
Word is that a ‘tax haven’ ‘list’ was produced at G20 but nobody knows who’s on it yet.
Report abuse
Shill
In my opinion, very well put. This island needs diversification in industry.
Report abuse
I’m with you Shill and I’m in my fifties.
Report abuse
Shill – I agree. Prosperity is only one of the means of achieving real goals such as happiness and social contentment. Being prosperous is not a goal in itself. If it makes people more stressed and less happy it’s not really working.
Of course I want the Island and its people to be prosperous, but that has to be balanced with being a society of people who, presumably, want a contented lifestyle.
Report abuse
“Word is that a ‘tax haven’ ‘list’ was produced at G20 but nobody knows who’s on it yet.”
http://www.oecd.org/document/57/0,3343,en_2649_34487_42496569_1_1_1_1,00.html
http://www.oecd.org/dataoecd/38/14/42497950.pdf
Report abuse
Sorry to disappoint you all but I believe the CM has been totally vindicated. His recent excercise in signing TIEAs has been utterly jsutified. Well done Chief Minister.
Unlucky LAG – you lose ;)
Report abuse
Paul L P – thanks for the links. So it is official – we are not a tax haven.
Meanwhile, Switzerland is a tax haven but is rapidly renegotiating to sort itself out.
As Jackie says, credit where it is due for ensuring that we keep up with the evolving moralality of international finance.
Report abuse
Whatever some people may think of our leaders, they have done an exceptional job over the past 6 months in ensuring that we went down the right line in signing up to TIEAs and investing heavily in PR trips to ensure that Guernsey was not branded alongside the unco-operative jurisdictions.
Nobody should under-state the sheer magnitude of what has been achieved, and what it will be worth to everybody, and I mean everybody, in Guernsey.
But it certainly isn’t a time to be resting on our laurels as there will always be challenges ahead to ensure that we keep on the straight an narrow, as indeed there should be, and the proposed extension to the EU Savings Tax Directive by 2012 will bring its own new challenges.
I can’t help observing though that all of what’s been achieved has been achieved without every leg of the process of signing up to TIEAs having been debated ad nauseum by the House. If it had been, then we would have got absolutely nowhere and would probably still be debating whether we should sign TIEAs or not, or perhaps deciding whether it was a more important topic to debate than paid parking ! Its another shining example of there being some instances where the Poliy Council needs to be able to make executive decisions without going to the House.
Report abuse
Funny isn’t it? A week or so ago we were going to be on a ‘black list’ and now we’re not. So because of a late panic and an active autograph pen we no longer help the wealthy and the multinationals hide their money away in a dizzying array of financial structures and help them avoid paying their fair share of tax?
Sweet for them, sweet for the companies that help them as they don’t pay tax on the profits of this immoral jamboree either.
So all across the world the poor get poorer and the rich get more and more benefit. As a Guernsey taxpayer I am subsidising the increase of the wealth gap, both at home and globally.
Roll on 10% GST by 2012.
Report abuse
Arnald – what you have stated is nonsense.
Obama and co realised that shutting places like us down would further harm trade across the world and therefore deepen the recession. Which in turn would make the poor even poorer.
And I agree with Jackie – Trottski has done a good job. Astonishing really.
Report abuse
i think shill makes good points, and i too fear for the quality of life on the island which has been falling for the 6 odd years i have been back on the island. but htings can’t stand still i guess. Arnauld also makes a good point. however we want to look at ourselves gsy does allow people to pay less tax, we are a tax haven to a certain extent. I don’t want the finance bunch to go but can’t help thinking we’d all be better off poorer on a quieter island.but i am a bit of a hippy sometimes!
as for the cm and policy council, well done for sure but before we go and build statues for them they have just been doing the job our tax money pays them for, the rest of us manage to do our jobs without public thanks so they can too.
Report abuse
Arnald – unless you pay an awful lot of tax, I doubt that you are subsidising the system that you accuse of increasing the wealth gap. In fact, it is more likely to be the other way around – the fact that we are a low tax jurisdiction attracts business here, the tax levied on wages of those working in the industry (andthe spin-off service industry) subsidises an otherwise unsustainable lifestyle here on Guernsey – from which you undoubtedly benefit.
Report abuse
David – you are absolutely right about the work that’s been done and I agree about the time they waste on minor things like paid parking.
But we have to bear in mind that these TIEA’s are not there for show, or at least I assume not. With the current global economic situation and the recent forays by tax authorities into offshore centres (eg the UK amnesty re offshore accounts) are we going to see these TIEA’s worked really hard by the big countries? What will this mean for Guernsey? Are we going to see some measure of loss of business? I imagine the Island will remain strong generally, which is of course good. I don’t think, either, that we will gain any new business from the black or grey listed places as, clearly, if it’s in such places we don’t want it, not with the high reputation we have worked so hard to achieve!
Report abuse
Arnald
For the last few weeks in the run up to the G20 summit I have sat back and listened to an endless array of ill informed pundits spouting this same rubbish and I for one an fed up with it. Being an anti-capitalist does not make you an expert on offshore finance and it certainly does not give you a right to assume that everyone doing business in Guernsey is involved in tax evasion. They are not.
It would be nice if, just for once, someone would damn us with actual material evidence of criminal wrongdoing rather than with puritanical socialist soundbites.
Report abuse
>>As a Guernsey taxpayer I am subsidising the increase of the wealth gap, both at home and globally.<<
Look at it this way Arnald. Now we are white listed at least the big business is still here to be taxed. Move on and get back to the zero/10 issue.
Report abuse
CD
It doesn’t have to be criminal to be wrong. We make money by helping others avoid paying tax. By not paying tax in a jurisdiction, the burden is shiifted onto those that do pay tax, just because a wealthy individual or a multinational doesn’t want to pay any tax doesn’t mean schools need no money, or hospitals, or street cleaners. The same public infrastructure exists it’s just that it has to be paid for, in the majority, by the poorer and middle classes.
What more evidence do you need? Avoiding tax means more people have to pay more money in that jurisdiction, reducing their standard of living just so the rich can get richer.
That’s the reality.
Report abuse
As I understand things from the G20 meetings these is a list of “tax Oases”,whom they have voted to “dry up” and there are those who refuse to cooperate in any way and are on the “black list”
Report abuse
Arnald – dear oh dear.
Companies and individuals pay more tax in France than in the UK. So by your logic a French company, EDF for example, should not have a company in the UK as it is avoiding paying French tax. Mmmm.
Report abuse
CD do you not appreciate how much the Offshore Finance Centres have helped facilitate the current crisis via securitisations which in economic terms misallocated hundreds of billions of capital which has now imploded and tax payers (not Guernsey’s though)will now have to pick up the tab for? We, amongst others, were a very useful cog in the machine that pumped up this credit bubble making people believe that you could truly turn lead into Gold. There was nothing illegal about it or tax evaded but the effects have been far far worse. Rather than help spread risk out to those better to hold it , its led to a collapse which we will be lucky doesn’t turn into a full scale depression. For an island of just 60,000 souls we’ve probably played a hugely disproportionate role in this current malaise.
Report abuse
No, sorry Paul V., I disagree, at least in part, with what you are saying.
The current negative focus on offshore finance detracts from the fact that the current global financial crisis was caused by mortgage brokers (onshore) in the USA selling mortgages to people who could not repay them. It was caused companies and hedge funds (some, admittedly, based offshore – but most onshore) who bundled up those debts and sold them on to banks. It was caused by (onshore) rating agencies in London and New York who gave ‘A’ ratings to those financial products. It was caused by banks all around the world who bought these financial instruments without knowing what they were buying.
If the purpose of the G20 talks was to apportion blame then the UK and the USA should step out of their own glass houses before they start throwing stones. If the purpose of the G20 talks was in fact to fix the problems that caused the current downturn then they need to consider the flaws within the fabric of the entire capitalist system and not just scapegoat so called “tax havens”.
I would suggest that the current drive against “tax havens” actually has little to do with regulating the world’s financial systems. This is, I would suggest, primarily a political manoeuvre with three key objectives. Firstly it aims to deflect attention from the real deficiencies in onshore global banking regulation and and tax legislation (many of which Gordon Brown is directly responsible for). Secondly, this strategy represents an ineffective attempt to find additional tax revenues to plug the massive gap in finances caused by this governments’s excessive borrowing and expenditure and, thirdly, this is perceived by many to be an attack on so called “fat cats” which, in the current climate, has obvious populist appeal for political leader keen to win favour.
Offshore jurisdictions are of course at the very forefront of capitalism and it is capitalism that has caused the current economic downturn so it is understandable and right that we be expected take our share of the blame. I make no apology for my personal belief that, in the longer term, it is also capitalism (rather than socialist bureacracy) that will lift us out of this hole, just as it has done when the economy has crashed in the past.
Report abuse
I’m with Shill. Very well put.
Report abuse
Paul Volker – don’t believe the hype. Who dreamed up the ever more risky securitisations or securitisations and packaging of loans? Who built up a culture of ever greater risk taking in order to fuel the huge “profits” demanded in the City and the bonuses that went with it? Was it the moguls in the merchant banks in London or New York? Or was it the guys sitting in Admiral Park?
Business is done here but I doubt that any of the madcap scheme was devised here.
Report abuse
Yes Paul Volker
As Dave Jones likes to say “we’ve punched above our weight.”
Gilthead
Dear oh dear. Keep believing the myth. Guernsey’s industry wouldn’t exist in this form if we weren’t abetting the distortion of global capital from where it’s needed most to where it’s needed least.
Wanting to avoid tax means that you do not believe in the government of the jurisdiction you are domiciled in. That is anti-democratic. If you don’t like being taxed then move to somewhere that doesn’t tax you. Move everything, not just the registered address, and use their resources and public infrastructure to make your profits.
HOW MANY TIEAs HAVE BEEN SIGNED WITH DEVELOPING NATIONS? Angola? Kenya? Read all about it.
Report abuse
CD
The risks in the “originate and distribute” model are generally accepted now. Like you said, brokers or even banks paid on fees and more interested in deal volume, the bonus structures and the conflicted rating agencies. But we’ve been happy to stuff our faces on legal fees setting up and administering these structures. CISX wouldn’t be viable without the debt issues from them.
Remember it wasn’t until we were strong armed into getting rid of them that we were happy to peddle the exempt company which in economic terms was a shocker. I’m surprised they allowed us to get away with that structure for so long.
Report abuse
So CD
You are in favour of promoting the distortions caused by the existing lack of regulations?
Unfortunately you, and the powerful lobbies, will continue to suppress the poor.
The justification that it keeps SOME Guernsey residents in opulence is completely disproportionate with the misery currently being felt worldwide by ordinary people that believe people like you.
Sorry. Thems the reals.
Report abuse
Has anyone here, just for a moment, considered the fact that if our local government, which has invariably been akin to the cast of the Muppet Show over the years, had had the foresight and intelligence we expect them to have, and ensured that they properly supported a healthy diversity of industries instead of just one – and a evidentially unstable one, at that – we could have a well balanced, financially self supporting island, be able to afford to actually live here, and have generations to come growing up with a better understanding of how important job satisfaction, personal development and happiness is, rather than the endless pursuit of money and the apparently illustrious skill of making the rich richer.
I think that the decision at G20 to apparently condone the unfettered flow of some good, and huge amounts of bad, cash, throughout our poor Channel Islands, will be recognised in years to come as the worst decision ever made.
Report abuse
WE LOST THE BATTLE BUT THE WAR IS NOT OVER.
Tax haven critic pours cold water on financial white list
Story from the Guernsey Press today Saturday 4th April 2009
Richard Murphy, tax haven critic says its too early for the Guernsey finance industry to start celebrating.
‘Guernsey will be out of business. Its going bust because it can’t maintain its own budget because you can only make your books balance with 6% growth. That will never happen again and is’nt happening now’.
‘Secondly, the sorts of activity you undertake will end up, not tomorrow or next year but in a few years time being closed down, The party is nearly over’
Some very strong words from Richard who is also of the opinion that Gordon Brown is asking the OECD to take it a lot further than the list Guernsey has avoided getting on and to extend it to tax avoidance, intimating that this is just the beginning of the end and not the end of the end.
You can find out more about Richard Murphy and his thoughts at http://www.taxresearch.org.uk/Blog/richard-murphy/
Report abuse
Much of this whole argument is shrouded in half-truths and opinion, but I’m with Shill that regardless of your opinion of the the merits & morality of the finance industry, the main negative outcome from this decision is that it will delay Guernsey from realistically encouraging diversification in the local economy. Our politicians talk about it, but it’s largely nonsense – they are, in practice, completely beholden to the likes of GIBA and have no idea what to do about it. Some, like Trott, actively think that they don’t need to do anything about it.
Let’s face it, Guernsey plays ‘follow the leader’ and has no strategic idea where it’s really going. The finance industry wasn’t an active choice, it was a defacto position that every offshore juristiction on the planet has taken, based on onshore experts deciding they needed to move their money somewhere. At least the IoM makes efforts to promote other industries, locally it’s basically a free-for-all in which it’s almost impossible to do anything economically unless you’re already rich, are in the finance industry, or a dependent of it.
The fact that we’d all be screwed if the finance industry left is not an indication to support the further expansion and dominance of it. It’s a very strong indication that we’re in a very vulnerable position and loading that risk even further is pure madness. Of course, developing alternative industries *should* have been done before the government crippled the economy with zero-10 – with that in place, there is little chance we will ever escape the dependence on the finance industry except via some catastrophic event, since we now have a vested interest in rejecting all industries except those which pay astronomical salaries.
Well done Guernsey, you continue to sleepwalk into an increasingly risky scenario that has only 2 modes of operation – the kind of success which polarises the haves from the have nots, or abject and total failure resulting in mass unemployment. You clearly have absolutely no concept of prudent planning or risk management, blinded as you have been to those things by decades of easy money and sloppy decision making which was largely delegated to GIBA.
In the end, we’ll all get what we deserve for allowing this situation to develop as it has.
Report abuse
“You are in favour of promoting the distortions caused by the existing lack of regulations?”
Go and have a look on the GFSC website and then tell us about the lack of regulations. As for the securitisation industry’s involvement in the financial crisis that is certainly true, they made credit cheap, but that is a matter for the regulators in the relevant countries. And Guernsey was no more than a very minor player in that industry.
All this hand wringing over the fact that Guernsey may have allowed some people to divert money away from corrupt incompetent politicians who will spend most of it into bribing their way into power with their latest nonsense and obese spending plans that make the western European poor reliant on handouts from their leaders like the Roman mob waiting for the corn dole and a day at the Collisseum.
If governments didn’t waste money they wouldn’t have to tax so high and drive capital offshore. Simple enough? Maybe waging a few less wars would pay for the hospitals and schools? Maybe encouraging people to work would bring down the tax burden rather than encouraging the expansion of the hand out reliant underclass? But its so much easier to blame anyone who has got off their backside and make some money.
Thems the reals.
Report abuse
I think Minister Trott should be commended on ensuring Guernsey plc is on the White List.
A lot of rubbish is being spouted about the poor being left to dwell in misery and abject poverty – this is just not true in Guernsey. OK the finance institutions do very well well but at least we have very low unemployment and the finance sector props up a lot of businesses i.e. tourism, hospitality, retail etc etc. I do not work in finance and i think my job would probably be secure without it but come on guys and gals: the island is not such a bad place to live is it? We cannot all be wealthy and as far as i am concerned jealousy is a wasted emotion: if people want to work in the finance sector they can – many people prefer to work elsewhere for less money but doing a job that is very enjoyable. I know a lot of people who work in the finance industry who are so stressed and unhappy that they are having to take medication to cope – what sort of a life is that? Trouble is they have got used to living above their means and have to stay in the sector to earn the money to keep that lifestyle up.
What we have to concentrate on is making sure the younger generation continue to realise that the world is not fair but they have choices. No one here has to wonder whether they will be food to eat tomorrow or healthcare available or education etc like the 3rd world. There are choices available.
Report abuse
Arnald
Are you by any chance Fast Robert? The style and content of your postings gives it away. Why the further change of identity ? Has your finance industry employer rumbled your postings again ?
Springbok
Murphy is losing all credibility due to his pure hatred of Jersey and his determination to drive them under based on pure lies. One blogger has taken him to task over his pivotal argument that TIEAs don’t work “because Jersey has only exchanged information 5 times with the US in 6 years”. He cannot accept that the reason for this is because Jersey does not do any significant US-related business ! he also cannot accept that those countries who are signing up TIEAs with offshore finance centres are actually very happy with them. If they weren’t, then why would they willingly sign them? I’m afraid that Murphy’s personal socialist views and his determination to wipe out all lawful tax avoidance threatens to undo all of the good work that he has done in addressing the genuine problem of tax evasion, for which he should take due credit.
Report abuse
“If governments didn’t waste money they wouldn’t have to tax so high and drive capital offshore. Simple enough? Maybe waging a few less wars would pay for the hospitals and schools? Maybe encouraging people to work would bring down the tax burden rather than encouraging the expansion of the hand out reliant underclass? But its so much easier to blame anyone who has got off their backside and make some money.”
Spoken from a position where our government doesn’t have to contend with global issues. Of course wars shouldn’t be a priority over public infrastructure, but you are deluded if you think that the rich and the multinationals are not paying their dues because of ‘government wastage’. Utter nonsense. In fact, it’s the type of rubbish you see proliferated as an excuse for people to be anti-democratic and uncaring. It gives greed an easy way out.
Having a Dave Jones-like swipe at other governments failings, of which there are many, and then concluding that because of those then Guernsey is paradise is true ostrich behaviour.
Next you’ll be telling me that the GFSC is an efficient business! Oh you did! Why do they have those millions stashed away? Why do they continually allow the formation of companies specialising in precisely the type of instruments that have brought global finance to it’s knees.
You talk about the unemployed and their ‘handouts’. LOOK AROUND YOU. That has to be one of the most ill-timed and unthought out statements ever. Err how much has it cost to ‘socialise’ the finance industry’s immoral mismanagement and the resultant catastrophic downturn for manual workers the word over? Get a grip.
The last thirty years of right wing global economic policy has proven how the drive for profit over social cohesion is morally bankrupt. How anyone can say ‘well done’ to those that have demanded more tax payers money than ever before AND THEN STILL BLAME THE UNEMPLOYED are truly lost to decency.
Report abuse
>>WE LOST THE BATTLE BUT THE WAR IS NOT OVER.
Tax haven critic pours cold water on financial white list<<
Murphy reminds me of the Black Knight from Python’s Search for the Holy Grail. Even after having every limb chopped off the stump still won’t admit defeat and shouts something like ‘come here and I’ll bite your ankles’.
Report abuse
Somewhere in between Murphy’s rantings and the pro-finance lobby camp there are some grains of truth.
No, the TIEAs are not particularly effective as a way to limit tax avoidance. Countries sign them for the same reason we sign them – because they’re a convenient political shield. They say “we’re doing something” – when in practice they’re largely worthless because the effort required to use them in practice is rarely justifiable, when it’s possible at all. The only way to actually tackle the issue (if you accept it is an issue) is automatic exchange of information – but no-one on either side is actually ready to sign up to that, because no-one *really* wants to clamp down on avoidance (the UK benefits from it too). They just like to pretend they do, because it gets them political brownie points.
So we’ll all continue playing this TIEA charade, pretending it all means something. It doesn’t, it’s really solely about balancing vested interests on all sides while walking the political tightrope.
Report abuse
Devlish
You might be right but the extension of the EUSTD by I think 2012 to cover savings income from trusts, companies, foundations and some insurance policies, will start to make a huge difference particularly as the withholding tax rate leaps towards 35% as scheduled.
I predict that the option to withhold tax from Guernsey income will be abolished well before then. It wouldn’t surprise me if its included in this mobth’s UK Budget. That would result in automatic exchange of information between every country participating in the EUSTD.
There’s just one problem with that….the US, Singapore, Hong Kong, Dubai and Panama are not signed up to the EUSTD and they may never agree to do so. What then ? Offshore funds pour into those centres from well-regulated and co-operative jurisdictions such as Guernsey into unregulated territories.
More tax collected ? Not at all. The OECD are well aware of this problem. Far better to work with us and have a co-operative territory than to see funds disappear into bandit country. Its a far tougher nut to crack than many realise.
Report abuse
Ah, Springbok, still trying?
I hate to say it, but I doubt Guernsey is going to hand over any cash now.
Report abuse
The white list means Guernsey has parity with the UK and the United States as a finance centre; We can go forward confidently knowing that we are a credible place to do business.
Report abuse
” but you are deluded if you think that the rich and the multinationals are not paying their dues because of ‘government wastage’. Utter nonsense. In fact, it’s the type of rubbish you see proliferated as an excuse for people to be anti-democratic and uncaring. It gives greed an easy way out.”
Thats absolute rubbish, the rich don’t analyse government spending policies, they just decide whether they’ll be charged too much and move their capital elsewhere. A point so obvious it shouldn’t need saying. Its not an excuse for anti democratic behaviour, in fact the high tax high and subsidy policy of some governments is truly anti democratic, you only have to look at the years of Labour spending announcements to see this in action.
I’ll take it that your argument is rather weak given how rapidly you have been reduced to sleights and insults but never mind.
“Having a Dave Jones-like swipe at other governments failings, of which there are many, and then concluding that because of those then Guernsey is paradise is true ostrich behaviour.”
Wow, me like Dave Jones? I never thought that I’d hear that. True ostrich behaviour is the belief that government can suck up society’s capital for their own spending ambitions ad infinitum is what the ostriches are doing. I don’t think Guernsey is a paradise but I struggle to think of many better places for the moment, people here don’t know that they’re born!
“Next you’ll be telling me that the GFSC is an efficient business! Oh you did! Why do they have those millions stashed away? Why do they continually allow the formation of companies specialising in precisely the type of instruments that have brought global finance to it’s knees.”
Please tell me what within their remit would have required them to prevent the formation of those companies?
“You talk about the unemployed and their ‘handouts’. LOOK AROUND YOU. That has to be one of the most ill-timed and unthought out statements ever. Err how much has it cost to ’socialise’ the finance industry’s immoral mismanagement and the resultant catastrophic downturn for manual workers the word over? Get a grip.”
Your talking about chalk and cheese here (as well as being childishly patronising). The finance industry hasn’t been socialised and you clearly don’t understand the bail out plans that have been put in place. There is no point looking around me because I wasn’t referring to the Guernsey unemployed (obviously, as we were discussing the movement of capital to Guernsey). I was looking around me when I saw what was happening in the UK to the unemployed, were you there looking around?
“The last thirty years of right wing global economic policy has proven how the drive for profit over social cohesion is morally bankrupt. How anyone can say ‘well done’ to those that have demanded more tax payers money than ever before AND THEN STILL BLAME THE UNEMPLOYED are truly lost to decency.”
The last chuck in the left wing book of argument techniques, twist someone else’s statement until it becomes easier to attack. I don’t blame the unemployed, I blame the government that encouraged economic inactivity rather than providing a vibrant economy with jobs for people, a government who failed to control a credit boom because it suited them to take the short term benefit of a false economic boom derived from cheap credit and government expenditure. Those who treat the unemployed as their playthings in this way are those who are truly lost to decency.
Report abuse
But TBC, you are suggesting that the Guernsey industry is completely different to the global industry. It is not. We provide services for others to avoid paying tax in their home jurisdictions. This is interference. This is obviously going to attract the rich to hide their cash here, whilst they live there, using there resources but not proportionate tax to fund them.
You are suggesting that billions of pounds offered by the global system is NOT going to be funded by the taxpayer? Last time I looked RBS had a government share of 58% which will rise into the nineties once all their ‘bad business’ has been insured. Where was all that bad debt being horse traded?
We need to stop looking at Guernsey from the safety of your office, something Trott was advised to do, as he spent enough time getting the pre-requisite TIEAs for the OECD to pat us on the back for a while, but to see the entire shadow banking system as an entity that needs tackling holistically.
If we in Guernsey are so perfect and that no bad practices (including the proliferation of esoteric financial profits that only exist to make the rich profits from tax competition – sorry don’t care what you say, that is an absolute abuse of what taxation is supposed to achieve) then perhaps we should be visiting the ‘not so good’ jurisdictions and telling them to pull their fingers out and ‘be like us’.
Or aren’t we that different after all?
Oh and this – “I blame the government that encouraged economic inactivity rather than providing a vibrant economy with jobs for people, a government who failed to control a credit boom because it suited them to take the short term benefit of a false economic boom derived from cheap credit and government expenditure. Those who treat the unemployed as their playthings in this way are those who are truly lost to decency.” – doesn’t really get more leftist! You can blame Thatcher for starting that in the UK.
Report abuse
>>government share of 58% which will rise into the nineties< <
I’ve got some bad news for you. Once the taxpayer has paid off the debt the bank will be reprivatised. That’s the beauty of capitalism; a read of any of Karl Marxs letters will have taught you that
Report abuse
TBC
Guernsey truly is a paradise compared to most other developed countries, every night I turn on my TV only to be greeted by more protests or riots in most of the countries that keep telling us that we have got it wrong. I don’t think that is being Ostrich like, it is simply stating a fact, sure we have our own problems and we will work our way out of them as the island has always done but I refuse to ignore the fact that we as an island have done remarkably well over several decades, maintaining our services and building an economy which still remains the envy of many.
Report abuse
The anti ‘Low Tax Jurisdiction’ group seem to be gaining a foothold in Guernsey.
First there was Lawrence,then along came Fast Robert and now Arnald is taking up the battle.
I wonder if they would consider holding a meeting
where others of a like mind could air their views?
Report abuse
Great idea Ray. And as it’s Easter why not Christen this new grouping ‘The holier than thou trinity’ ??
Report abuse