1

Frank

Can somebody please answer a question which I have raised before? Why do China and the Middle East countries want to use Guernsey when similar expertise and services are available in Dubai, Singapore and Hong Kong and other places.

Great if they do want to use Guernsey, but I don’t see why they would want to when other centres are available in a more convenient time zone.

Is it really worth the expense of all these trips – should we not concentrate closer to home? Anyone got an answer?

Report abuse

3

Arnald

Frank
The clue was in the Panorama program. Our natural client base is European, but to make it worthwhile we need to be able to offer taxfree services. With the EU wising up to the theft, the approach is to make a mockery of national borders and use the international system to route the money through the mid and far east, where those regs don’t apply.
Of course it’s all done on the premise that the emerging markets are full of hungry investors wanting to buy the dollar and Kendall Mint Cake or shop down the Bridge charity shops, but it’s just another opening for the rich to ruin the world.

We would rather be in bed with inscrutable oil dictators with appaling human rights records than actually tell the truth about what we do. We are so far down the line that people have the temerity to post that they see nothing wrong.

Yet a single mother fails to declare a new love interest has moved in and she gets hauled through the press as some sort of cheating scum.

Until full disclosure is enforced on us, we should treat the finance industry as bent. And it goes all the way to the top.

Report abuse

5

David

Frank
Just because there is some money from Russia, Africa and South America here, you are assuming that it is all “undesirable”. That’s a very broad statement indeed. I know of money from those parts of the world which is here and has been through every conceivable check and clearance before it could be accepted by any local financial institution. Of course there is potentially an awful lot of undesirable money from those and indeed other areas of the world. Guernsey has become very good at filtering out the “undesirable” from the “acceptable”. Not everyone from those countries is crooked you know !

Of course Guernsey is politically stable. When was the last time our “parliament” was overthrown ? We don’t have any political parties. Yes, the States could be doing better in many areas, but “unstable” ? Are you serious ?

Places like Singapore, Hong Kong and Dubai are outside the scope of the EUSTD. That’s not surprising as they aren’t even remotely connected to the EU, so what incentive do they have to sign up to it ? That is in fact the EUSTD’s biggest weakness. Billions of undeclared funds have disappeared from the European region to Dubai and the Far East in recent years, so minimal extra tax has been collected by the EU as a result. Its great that such monies are even further away from here, but in terms of achieving the EUSTD’s objectives its quite an obvious and very large leak in the bucket !

Report abuse

7

Frank

David – I quite agree – you cannot assume that all money from Russia etc is dirty, but your comment “All 3 of Hong Kong, Singapore and Dubai have attracted Russian and other undesirable money which even the Swiss bankers don’t want to touch” meant to me that this was your opinion.

I don’t think you need to be so dramatic as to talk of government overthrow when it comes to government instability. Instability could also be interpretated as lack of clear policy and staggering from one crisis to another, amongst other things.

Report abuse

9

Arnald

Is that DD including contact with the jurisdictions where the beneficiary resides?

If not, why not? It would make sense wouldn’t it?

Report abuse

11

David

Arnald
That’s a very daft question. Of course it would involve due diligence in the jurisdiction where the client is based. It would also involve utilisation of specific databases such as WorldCheck. But then of course you would know that if you worked in compliance as you have previously claimed, wouldn’t you ?

Report abuse

13

JL Seagull

Here’s one for the pub argument: which is worse

Historic Holocaust Denial

or

Current Illegal Nuclear Proliferation

?

Report abuse

15

Steven

David, you said, “I can’t possibly answer your first question.”. Would that be because you have no way of quantifying the ignorance of those that benefit from tax avoidence, or because they are already aware of the damage they are perpetrating.

Report abuse

17

Steven

David, Surely increasing our rate of income tax from 20% to 25% would go a long way to balancing the books probably even that would be more than enough. No need for any complicated tax rebate system, and the collection infrastructure is already in place. Raising income tax is the most efficient form of taxation, much more efficient than indirect taxation. However having an efficient infrastructure is probably all that is needed to balance the books.

The real core problem though is that some politicians put corporate interest before societal interest. And the first move in addressing this problem would be to introduce anti corruption legislation. Of course some would say that there is no need for this in Guernsey, but as the finance industry would say, we should be seen to be clean.

Report abuse

19

David

Arnald
I understand the point about retail, and there is no easy answer. That is the wrong reason for not doing it, but I see your point. Some will claim that we already pay VAT in effect, but as it goes straight into the pockets of some greedy retailers its not a tax at all. We cannot fight the internet, but we can of course ensure that imported goods are taxed upon receipt. Its not difficult as they cannot come in without clearing customs.

GST is not a sign of desperation and, let’s face it, we all know that it’s coming. We currently remain the only jurisdiction in the whole of the European region, and indeed in many countries beyond that, without any form of consumption tax.

And its not overloading the poor at all, because the Social Security system can be used to directly pay monthly credits to low earners by direct bank transfer in order to ensure that they are not affected by GST at all. Without such a system in place, even I could not support GST ! For example, someone earning £25k is likely to spend at least £18k of that on items subject to GST. At 10% that’s £1,800 a year, or £150 per month, so simply pay them £150 per month directly. The burden therefore doesn’t fall on them at all, which seems pretty fair to me.

Rightly or wrongly, a 20% income tax top rate is seen as sacrosanct. As ever, we won’t attract wealthy open market residents if we are charging say 30% income tax when they can pay 20% in Jersey or 18% in the Isle of Man. But, and its a big but, if all three islands could get together to jointly agree a top rate of 25% then the competition argument might just be circumvented. Can’t see it happening though.

Report abuse

21

Arnald

Greg
I haven’t said that I don’t want successful and rich people to enjoy whatever they want. I just want them to play by the same rules as the rest of us. I don’t know if you understand that a 10% rise on everyday goods would run many, many households towards deficit. They would have to consume less. If they already ration themselves, then that tenth could directly translate as a reduction in their standard of living.

The knock on effects, resentment at the lack of freedom to choose, breeds contempt. Will the sales pitch involve highlighting that the very people we are having to pay extra for every day with our basic purchases, reminded every time we buy our milk, are the ones that can bandy about 10% as inconsequential?

If that’s the case, instead of risking more public anger and a possibility of forcing the internal economy to sell up and who-knows-what, why not tax those that will not even notice the difference?

The opposition is purely ideological. It is not based on a realistic notion. It is no argument to state that they pay more into the pot by value. The equation is simple for them.

I will maintain my wealth at the expense of others because without my undiminished wealth I don’t stimulate the economy.

That means their success is only measured in wealth. No one can tell me that successful businessmen scrimp. 5, even 10 percent would not register.

If these guys want to maintain a stable and mainly contented island, with no increase in anti social crimes, no media attention on various needy groups raising protest, no rise in unemployment, no more shops closing down, less hostility towards the States, and the tiniest hint of enlightenment, then there should be a concerted attempt to raise a top band of income tax – maybe temporary whilst we ride out the changes – and hope to protect this “excellent services” tag given by the WAO.

Surely it is in the best interests of those wealthy that reside here to not watch Guernsey become more bitter than it already is.

We have a deficit. We must work together to get it as straight as possible, but it must be done with the minimum of disruption. It is not the poor that have created this recession, their quality of life should not be threatened more than necessary. Without the bottom 20%, the top 1% would not be as comfortable, or indeed fulfilled.

One would hope that the wealthy learn responsibility along with their increased influence. Is it responsible to cling on to an ideology, throw a hissy fit when you don’t get your own way, and then watch as the society you have just left suffers unduly?

Of course it isn’t. It’s childish petulance.

If your family, neighbour, child’s schoolfriend etc were suffering, would you not expend some extra time, money and effort into trying to make them suffer less? Those that are able always rise to the occasion.

Why is it always assumed that the already worked-to-the-bone below average earners are able to take any more?

It’s completely counter intuitive at all levels of human nature. There is no punishment in someone with wealth giving more if they can afford it. Waiting for them to do it voluntarily in enough concentration to make a difference is lunacy. It has never happened on any scale that doesn’t involve them becoming some sort of overlord. It doesn’t work.

The States needs guts now more than any other time. Who does it serve?

Report abuse

23

Steven

David, earlier when you mentioned last weeks news I presume you meant when Obama announced on Sept. 25 that Iran has been caught with a “secret nuclear facility” with which to produce a bomb that would threaten the world.

That statement completely ignored that Iran voluntarily reported the facility to the IAEA on Sept. 21.

Israel in colusion with America are setting Iran up for invasion in a similar fashion to Iraq regarding WMD. Subsequently the world came to realise that the WMD didn’t exist. Furthermore one of the principle inspectors who was trying to tell the world the truth died in mysterious circumstances.

Iran to my knowledge is signatory to and have complied with the Non-Proliferation Treaty, Iran’s nuclear facilities are open to inspection by the International Atomic Energy Agency (IAEA), which carefully monitors Iran’s nuclear energy program to make certain that no material is diverted to nuclear weapons. Israel on the other hand has always refused to sign up to the treaty.

Last Spring, Rose Gottemoeller, an assistant secretary of state and Washington’s chief nuclear arms negotiator, asked Israel to sign the Nuclear Non-Proliferation Treaty. Israel refused.

The United Nations passed a resolution calling on Israel to sign the Nuclear Non-Proliferation Treaty and to submit to inspections. Israel refused.

The IAEA asked Israel to sign the Nuclear Non-Proliferation Treaty and to submit to inspections. Israel refused.

The IAEA and all 16 United States Intelligence Agencies are unanimous in agreement that Iran is not building and does not possess nuclear weapons.

In 1986, Mordachai Vanunu blew the whistle and provided photographs showing Israel’s clandestine nuclear weapons factory underneath the reactor at Dimona.

Israel made the same accusations against Iraq that it is making against Iran, leading up to Israel’s bombing of the power station at Osirik. Following the invasion of 2003, international experts examined the ruins of the power station at Osirik and found no evidence of a clandestine weapons factory in the rubble.

The United Nations has just released the Goldstone Report, a scathing report which accuses Israel of 37 specific war crimes and crimes against humanity in Gaza earlier this year. Israel has denounced the report as “Anti-Semitic (even though Judge Goldstone is himself Jewish), and the United States will block the report from being referred to the War Crimes Tribunal at the Hague, thereby making the US Government an accessory after-the-fact.

So David, who’s the bogeyman?

Report abuse

25

TL

On this debate I find myself agreeing with Arnald. Rather than GST, I would prefer to see a % or two on income tax, or possibly a second band at 25%, with a healthily high threshold.

This will not be enough to change the reasons for people wanting to move or live here but will be better for the island as a whole than GST, in my opinion.

Can’t see it happening though.

Report abuse

27

Arnald

Steven
Yes, and as recently as September, the Israeli government refused an IAEA inspection. Why?

Report abuse

29

David

Steven
On the other hand the rise in domestic abuse and criminal damage also potentially signifies a community with a severe alcohol-related crime problem.

Report abuse