‘Tax haven’ reports disappoint
Thursday 9th April 2009, 2:30PM BST.
GUERNSEY is still being referred to as a tax haven because people are jealous of the island’s strong economy, the chief minister said yesterday.
Despite Guernsey being put on a white list of co-operative financial centres by the Organisation of Economic Cooperation and Development, the tax haven tag has stuck in national and international media reports.
A story in the Times Online this week stated that Prime Minister Gordon Brown planned to ‘follow through the G20’s decision to clamp down on tax havens by writing to the Crown Dependencies of Jersey, Guernsey and the Isle of Man calling for greater transparency’.
Chief Minister Lyndon Trott said the reference to Guernsey as a tax haven was disappointing after the OECD’s endorsement.
‘Continued reference in the national and international media of Guernsey as a tax haven is frustrating. We do all we can to ensure the island is recognised as a low-tax jurisdiction, but while our economy remains strong, as a low-tax jurisdiction, there will always be jealous eyes,’ he said.
Deputy Trott said he had not received any communication from Mr Brown, but just before the G20 summit had received a letter from Chancellor Alastair Darling welcoming the continued efforts Guernsey had made in the area of tax transparency.
‘Plans for further tax information exchange agreements are well advanced and more should be signed in the next few weeks,’ he added.
Steve Le Page (pictured), chairman of the Guernsey International Business Association, said Guernsey’s international reputation was far more important than being labelled a tax haven in the media.
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Mr Trott needs a cure for his tunnel vision. TIEAs are only a tiny part of what the G20 countries want from places like Guernsey. The required transparency is more than being willing to exchange tax information. Guernsey is NOT transparent as ownership details of companies and trusts are not in the public domain.
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Frank
To put your comment in perspective, beneficial ownership of companies is not on public record in the UK, the US, and far as I know in no other G20 countries, so its hardly appropriate for the G20 countries to demand this from offshore finance centres.
I assume you dont work in the finance industry because if you did then you would know that there is no such thing as an owner of a trust, but there is no public register of trusts in those G20 countries whose domestic law recognises trusts. Indeed, the provision of trust services is not even a regulated activity in the UK. Guernsey’s regulation of those who provide trust services is within the top 3 or 4 jurisdictions anywhere in the world.
Its always useful to put some perspective on comments such as yours. It is all too easy to otherwise get fooled by some of the misleading propaganda being spun by the anti-offshore brigade.
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David – my point is simply that Guernsey finance business is not transparent, regardless of what the case may be in any other country. Transparent to me means all information being openly available to the general public, and yes, you are right that this does not happen anywhere else either.
My wording in connection with trusts was chosen in the knowledge that not everyone in Guernsey who reads the GEP has your knowledge of financial matters and would know what a settlor, trustee, beneficiary or protector etc is.
Assets can easily be concealed and taken out of the tax man’s reach by using offshore financial vehicles, quite legally, and this is what the G20 countries will want to make more difficult.
It may be inappropriate for G20 countries to impose conditions on offshore finance centres which they do not observe themselves, but when has “reasonable” come in to the equation when politicians abroad have an agenda which is seen by the majority to be fashionable and the thing to do?
Is it reasonable for France to ignore Monaco and the USA to ignore Delaware?
The Financial Times has reported in the past few days that Gordon Brown will be asking places such as Guernsey to do more, which brings me back to my original point that TIEAs are not all that will be required and Guernsey needs to wake up to this fact.
I do not want to see our finance industry fail – it is vital to the island – but I do worry when too much attention is focussed in one area, and other areas are not given sufficient attention, which in my humble opinion is what is now happening.
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The reality is that the G20 outcome is the best of news for tax havens.
The almost practical value of tax exchange agreements are no threats to tax havens.
The greater danger comes when the wider world realises (as does Frank) that the G20 prescription was just water.
Best for the CM and his acolytes to keep their head down and not attract attention by indignant protests and references to low tax jurisdiction.
I’m not at all sure that anyone would be jealous of Guernsey’s strong economy. Massive budget deficit, no money for essential infrastructure development, increasing inflation through increased fuel costs and food increases. need I go on?
Rather lucky for the island that Brown is taking Richard Murphy and other for a ride if they believe he is genuinely of a mind to be rid of tax havens.
Comments such as we have seen from politicians, Peter Niven et all might just upset the apple cart and make more realise just how empty, and ineffective, the G20 proposals are.
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