‘Inevitable’ plug would be pulled on zero-10, says Giba
Thursday 15th October 2009, 2:30PM BST.
FINANCE sector leaders admitted yesterday that there had been an inevitability to the news that the EU was to pull the plug on the island’s zero-10 tax strategy.
Guernsey International Business Association chairman Paul Meader (pictured), speaking after a morning catch-up and briefing with deputies, said confirmation that some EU member states did not believe changes made to the island’s tax structure were in the spirit of the EU code of conduct did not surprise him.
‘There was an inevitability that it would come under scrutiny and although it may have come quicker than we might have expected, it is just one of a number of challenges that are being thrown at us.’
Another local finance figure expecting the news to come out at some point was KPMG tax partner Tony Mancini.
‘I knew the zero part of it was under threat and I think it’s been on the cards for some time. Tax transparency to a certain degree has been dealt with at political level and they are now going back to look at tax rates.
‘So we are undoubtedly going to be under pressure to abandon zero and the question now is how we are going to manage that process?’
Mr Mancini said there were some aspects which would be crucial to consider when coming up with a new rate, such as how the fiduciary sector’s interests were to be looked after with a move to a higher rate of corporation tax, as well as that of investment funds.
‘We have to look at whether we can come up with something to protect the investment sector. We have to look to see if there are any exemptions we can do.
‘If we can do that, then we can probably handle the damage.’
- To read Guernsey Press stories in full, click here for subscription details. Individual editions are now available online.
Island Life
All about Guernsey
Ambassador of the Year 2011
History & Heritage
Visitor Information
Guernsey's government
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
Useful Links
I seem to recall that when 0-10 was proposed all the experts exhorted the States to back it. It was the way to go etc. We are the experts, trust us. There may have even been some bullying of the “stick in the mud” Deputies.
Didn’t a lawyer from Brussels say at the time that “they (the EU) won’t like this”?
When Rhoderick Matthews tried to delay it for a year and save us £100m they castigated him, but wasn’t he proved right?
Then when it all falls on its face they say they knew it was inevitable this would happen.
I also recall the recurrent theme of the post mortems to the credit crisis – greed and incompetence. This was the conclusion of Treasury Select Committees, respected journalists and other significant commentators. Are Wall Street and the Square Mile being repeated in Guernsey?
Report abuse
This is the dirtiest aspect of all this. If GIBA knew all along why didn’t they push to get it compliant instead of…oh I see…
And there’s Paul Meader saying that services should take second place.
Ask no questions tell no lies.
Report abuse
The comment “There was an inevitability that it would come under scrutiny and although it may have come quicker than we might have expected seems to be one of total recklessness.
Perhaps it was a case of seeing if we can get away with something, and if we didn’t then the taxpayer can pick u the tabs if things go wrong.
If there was an inevitability, then it was reckless in extreme to allow Zero 10 to go forward without expressing such concerns.
Report abuse
Perhaps I’m being daft here but something in this article doesn’t smell quite right. If it really was inevitable that zero-10 would be ditched, why did we invest a fortune implementing it?
Valdubon – did Deputy Matthews really get it right or was it more a case of luck rather than judgement? I accept in the light of recent events his proposal would have saved us a fortune however I’m sure he didn’t have this present situation in mind when he made his proposal.
I’m not being critical of Deputy Matthews or his proposal – he says much I agree with – I just think we should be careful not to rewrite history and suddenly declare him a great visionary on the back of hindsight.
Report abuse
Harmonisation will be the only acceptable way forward as far as the EU are concerned!
Report abuse
Paul
I am just reading some stuff on proposed future directives from the EU Commission. One is a proposal on an EU –wide information sharing of UK taxpayer’s details, in fact that there should be a European wide tax data base for all EU citizens containing all personal tax details including VAT number if you have one, they tell us that this is necessary in order to combat tax fraud, there will be an automatic exchange of personal data between EU member states on VAT first extending that to personal tax data exchange as part two of the process. The question I have now, is will we have the same gun placed against our head to include the Islands in this massive personal EU tax register if we want to continue to trade in the EU financial markets? My bet is, that’s exactly what will happen next. This ratchet approach is designed to destroys us and merely complying will not be enough, I also believe they will start to attack our trust business in the not to distant future.
Report abuse
Dave Jones
It is morally wrong for offshore destinations to expect to prosper at the expense of others. If we wish to do business with the EU then there will be many implications and the legislation will be never ending.
If we don’t agree to their proposals then we will be required to attract business from elsewhere. There will be many pros and cons whatever the island chooses to do.
Harmonisation weighed down with a never ending barrage of legislation or a choice of becoming a wild card and seeing where this takes us.
One thing that is for sure the politicians will not be allowed to interpret the rules and regulations as they see fit. This is a luxury that no longer exists.
There are very interesting times ahead that’s for sure!
Report abuse
Dave Jones
That’s very scary, especially as we are already “EU citizens”. We may well be resident outside the EU but we are British citizens and Britain is a member of the EU. When we arrive back at Gatwick or Heathrow from abroad, do we go to the “EU” or “Other” passport queue ? We always go to the “EU” one because of our British passports (and because its always a much quicker queue anyway !).
I can’t see how such a register could apply to EU “citizens” rather than “residents”. What about British and other EU citizens living in eg Australia or the USA ? Or is it the EU’s plan to keep track of them as well (easily achieved when their EU passport next comes up for renewal) ?
Report abuse
Dave Jones – you read!!!! Crikey… and you still manage to spout the tripe you do.
Why is it wrong to share tax details in a community which is by its very constitution mobile? What is wrong with a tax register (as you so eloquently put it…)
Report abuse
Belinda
There is nothing inherently wrong with a Tax register from an EU or moral perspective.
The problem comes with the job losses and damaged local economy that could potentially happen from such measures.
Whatever our own personal views on the finance industry are, the simple fact of the matter is that the island has been in bed with it for too long now, if its forced away the island would seriously suffer.
Some people would argue its a good thing, but try telling that the the numerous people declaring bankrupcy.
Report abuse
If Guernsey loses its industry because another jurisdicition is trying to be more efficient, more transparent and a better player at proper business that doesn’t involve lying, cheating and robbing, then what does that say about us, and about those that doggedly defend it?
The slavers weren’t happy with the do gooder bible bashers were they? Or the white supremacists in SA when they reluctantly took apatheid back into the toilet with them?
It is our governments remit to provide a structure for long term development. If they do not have the wit to predict this obvious hostility and resentment, or the wherewithal to give non finance locals some hope in their existence (take it from the psychs – this constant “we’re so important without us you’ll die a slow painful death and get buried in a paupers’ grave with the inscription ‘A Lesser Being And A Fool’” presupposes that the work everyone else does is of secondary importance. It saps morale and breeds tension, usually in an undefined way, but mostly in beer, fighting and wife beating.)
None of these actions, none of the rhetoric, none of the vacant blank expressions and acquiescence towards whoever shouts the loudest displays any hint of progression or understanding.
If we cannot play fair, we shouldn’t play. Find a different ball.
Report abuse
David – Guernsey citizens are full British Citizens but not full EU citizens unless they have a close connection with the UK or another EU country. I understand you have to either have grandparents or parents that were born in the UK or another EU country; or they have been resident in the UK for at least 5 years.
Check your passport – if you don’t qualify you will have an endorsement saying you can’t work in the EU.
For example: my mother is English, my father is local. I am eligible to work in the EU through my mother however my father is not.
Report abuse
Paul
That solely applies if you are travelling to the EU (other than to the UK). If you travel to the US, say, then that distinction isn’t relevant.
I don’t have that restriction in my passport as my father was English. Your father presumably could have become so after x years married to your mother (as she had EU status).
Report abuse
If it was ‘inevitable’ that the plug would be pulled on zero-ten why did our finance sector leaders and the States go ahead with the plan in the first place?
I thought these people were supposed to be intelligent – how wrong I was!
As usual it seems that nobody thought this through properly, no wonder the island is in a mess.
Report abuse
I have a Guernsey passport and can not receive benefits or work in Europe.
All my grandparents where from this island.
As for giba I.O.D and the rest who wanted zero-10, can they not keep giving their useless advice.
If they want to help, can they not look after, their small self interest groups, but give advice for the people of this Island as a whole.
Report abuse