Facing up to the Future
How does Jersey intend to face up to the future?
This page contains the document produced by the States of Jersey titled Facing up to the Future. This document is at the bottom of this page with responses being in order above it. This is to make it easier to keep up with the latest documents and comments.
Transcript of conversation between Stuart Syvret and John Whiting of Price Waterhouse Coopers
A submission presented to the States by Senator Syvret
TAXATION POLICY IN JERSEY - MAR - 04 - Stuart Syvret
Letter to the editor of the Jersey Evening Post
42 Clubley Estate,
St. John's Road,
St. Helier JE2 3LF
1st March 2004
The public are much more aware of spin these days. We are now being subjected to spin. The debate about the way the Island is to respond to O% Corporation Tax needs opening up.
We are lead to believe that O% Corporation Tax is the fault of the EU and OECD. This is not true. In no way was Jersey told to go for zero Corporation Tax. What the EU actually said was that Jersey's two main Tax Haven devices, the Exempt Company and the International Business Corporation, were harmful and should be abolished. In what way harmful? Money that should remain in the country where it was made is haemorrageing into Tax Havens, thus depriving public services in those countries of much needed funds.
The choice Jersey made was to turn a blind eye to Europe's demands (justice in taxation didn't feature here) and insist on hanging on to its Exempt Companies and International Business Corporations at all costs. As the OECD said it was quite unacceptable to exempt companies banking offshore while taxing local businesses, the decision was made to abolish tax on local business. Meanwhile the race to the bottom was going on. Tax Havens competing for clients were lowering tax levied. The inevitable happened - charge them nothing at all!
So, Jersey companies won't have to pay tax either. Sounds wonderful, or does it? Not at all. " Jersey residents who own or control their own companies ( e.g. small service companies with the husband and wife team as the only two shareholders ) will have the profits of their companies treated as personal income and taxed under the personal income tax structure. " ( p.8 of Facing up to the Future ) This of course preceded by the promise at the beginning of Ch. 2 p.7 that " any new tax burden is fair and equitable ". This means that, unlike almost everywhere else in the world, Jersey offers no incentives to the creation of local businesses or employment through the use of limited companies. In effect, this document represents a sell-out. Jersey now belongs to the foreign companies. Many local businesses will now pay more tax than their competitors in the UK. Surely there must be more than six angry men?
All that the document Facing up to the Future offers is a future with an ever-growing Finance Industry. Stimulating economic growth sounds healthy, doesn't it? But, if the price we pay is population growth, the less attractive the Island becomes as a tourism venue. Make no mistake about it, the Proposal of the F & E Committee positively welcomes such an increase in population! So, we end up wrecking the Island and closing off for future generations the possibility of reviving tourism investment in a post Tax Haven scenario. More people, more flats, more houses, more golf courses, more rubbish, more sewerage, less fields and all this combined with higher and higher prices ...... we've seen how it works. This would no longer be Jersey. Why on earth would visitors want to come to such a place? We must not allow ourselves to be taken down this route.
We should constantly keep in the forefront of our minds the natural beauty and fertility of this Island which we have been given. Looking honestly to the future is essential because the situation in which we find ourselves now is becoming increasingly unsustainable. The Tax Haven will not last. It is only a question of time before it collapses entirely. Aren't the members of F & E aware that world opinion is moving against the type of aggressive tax avoidance strategies that Tax Havens provide? The outcome of over 30 years of short-sighted policies is that Jersey has very few options open to it. Either we must entirely restructure the economy or do what appears to be happening at the moment - adopt the ostrich position for a few further years in the vain hope of delaying the inevitable for a little longer. Are we seriously going to pay out ever-more of our hard-earned money when we see what has been done with it so far?
Do we, the people of Jersey, want to continue being ripped off just so that F & E can take us down this cul-de-sac a little longer? These are hard times now; there will be hard times ahead. We must remember that Jersey survived long before the Tax Haven and she will be alive in all her beauty long after it has gone. At least the Island will be ours again. Surely anyone can see that to give even more money to those who have brought us to this point is sheer lunacy?
Letters from the Jersey Evening Post
Jumble sales and soup kitchens
From the Rev Chris White,
Methodist Minister of Georgetown and Sion.
WHILE everyone recognises the need to find money to overcome the £100 million gap in future years, I question the means in which this is being done.
Although the retail trade may welcome the 5% surcharge on mail order goods which is being proposed, catalogue purchases remain a very helpful way for working families to buy clothes and household items. Mail order enables the cost of goods to be spread across a year and also gives a choice which is denied at the moment.
I would be more sympathetic with the retail trade if I could shop at discount shops I use in the UK, like Superdrug, Morrisons and Netto, to name but a few. Why, for instance, are we developing a luxury food shop (Marks & Spencer) in St Clement when most people really need affordable food?
If such a tight retail monopoly didn't exist as I feel it does, then my family would not be forced to buy clothing through mail order as we do.
When my local churches have jumble sales, I notice the crowds gather at the clothing tables and watch children being lined up to fit clothes. What I dread is that in the coming years the tax proposals will actually stop families making ends meet. This Island seems to have almost a phobia that we can offend anyone except the wealthy!
The Gospels have a clear bias in favour of the poor and they also oppose policies which create and humiliate the poor in the first instance. I hope that we never get to the point in the future where churches (which are themselves under severe financial pressures) have not only a huge resurgence of jumble sales every Saturday, but eventually become the soup kitchens of an economic depression right here in Jersey.
24SE7EN - In the Hot Seat
Association for the Taxation of Financial Transactions for the Benefit of the People ( ' citoyens ' in French )
I am a Jersey lady. For some time I have seen that things have been going badly wrong for my Island. That is why I joined Attac
Attac is an organisation campaigning in 50 countries for justice, democracy and fairness. For me it is a vehicle for being able to do something both for Jersey and for people in other countries who suffer as a direct result of greed.
There are those who find the name Attac disturbing and suggest it should be changed. I make no apology for this name. I often wonder why it disturbs people as most of us are familiar with the names ' War on Want ' and ' War Cry ' for example. We are not planning to attack anyone. On the contrary we put ourselves on the line in defence of those who are being constantly attacked by the greedy.
Stashing away money through Tax Havens in order to avoid paying one's fair share into the kitty is greedy. To honour the Social Contract everyone must pay their dues so that hospitals, schools, care of the elderly and the handicapped can be financed. Jersey has been hijacked by the Tax Haven. If you go into ' Google ' on the Internet and type up ' Tax Haven ', ' Escape Artist ' wil inform you that Jersey is indeed a Tax Haven. Try the O.E.C.D.; they seem to think so too!
Some call this Island a ' low tax area '. Who are they kidding? Lots of working people struggle to pay their Income Tax and, while it may be set at a lower rate than the U.K., I must point out that indirect taxes are added to the price of almost everything we pick up - rents, property, a loaf of bread ... No, this is not a low tax area. Not for us. Could it be a low tax area for those who use it as a Tax Haven? Of course ...
Sometimes it is politely referred to as " banking offshore ". Off whose shore? It's on my shore and I don't want it here. I'm told, often patronisingly, that we need finance and banks. Of course we do. I know that. What we don't need is the Great God Finance. The kind of activity that this Island is engaged in is shameful!
What exactly are these services provided to offshore users? Why should they be provided to individuals and companies from across the world via our small Island? Think about it. What comparative advantage does Jersey have over for example Skegness in this type of activity, apart from the minimal or zero taxation?
The U.K. public services alone lose at least £20 billion a year because of Tax Haven activity. Poorer countries lose at least £50 billion for the same reason. This happens to be the same sum as the annual aid programme. In a year or two the multinationals and super rich will no longer be charged any tax at all for pushing their money through our Island ( 0% corporation tax ). No wonder we are being asked to carry the can, pay the difference, keep the Island going! This is just not fair.
Let's grasp the challenge of the future. Insist on competent government. Call for a General Election and party politics so that as many of us as possible can together make post Tax Haven Jersey a success!
How does Jersey intend to face up to the future?
The States of Jersey has produced this document.