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Opinion

"Everything evolves and tax is no different"

Tuesday 08 June 2021

"Everything evolves and tax is no different"


With the new G7 rules provoking polarised views, Chamber of Commerce's Finance Committee has warned that the island should take care not to have any knee-jerk reactions.

Committee Chair Justin Clapham had this to say...

"They say that there are two certainties in life – death and taxes and people will always look at ways to avoid both. Just as there are huge advances in medicine etc. then one must expect taxes to change as well.

Tax rules have evolved over the centuries and will continue to do so well after the furore about these “new” reforms are enacted in one form or another.

The doomsayers, who have taken great pleasure in announcing the death of the finance industry on many previous occasions, will no doubt be jumping on their soap boxes making their voices heard that yes this time it is the end for Jersey and all other grubby little tax havens… but is it

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Pictured: "Chamber has been pressing Government for complete tax reform as the basic law is stuck in the 1900s."

The answer is a simple, no. 

The current proposals for certain companies to have their profits taxed as a minimum global rate will initially have a very small effect on business in the island and the island’s finance industry will continue to flourish but there can be no doubt that the current zero/ten system will need some modification over time.

The Government will be acutely aware of the movement of travel away from 0% corporate tax rates and Chamber expects that they will have been beavering away in the background for some time now going through multiple alternatives. It has always been known that zero/ten would not last forever.

Taxes need to constantly change to keep up with the ever changing face of commerce. Chamber has been pressing Government for complete tax reform as the basic law is stuck in the 1900s and maybe we will finally achieve our wish for a new Tax Law that is fit for purpose for all of Jersey, not only the finance industry.

It is too early to tell what changes will be needed for zero/ten but Government need to approach them carefully in a considered way and not get caught up in hype and make any knee jerk changes or comment that leaves the island vulnerable for attack.

 

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Pictured: "The current proposals for certain companies to have their profits taxed as a minimum global rate will initially have a very small effect on business in the island."

We fully expect any change to come through negotiation (no doubt difficult at times) and one hopes that the new rules are based on fact and not hearsay or hot air.

Everything evolves and tax is no different – one merely has to ensure that it evolves in a way that is fair for Jersey and its residents.

So is zero/ten immediately dead – no, but it will need some medical attention to ensure that Jersey has a long future ahead of it."

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