Costs Of Proposed Jersey Sales Tax Revealed

by Robert Lee, Tax-News.com, London

01 March 2004

A public meeting held in Jersey last week was told that nearly £2 million will be required by the tax authorities in order to police a proposed new sales tax.

The revelation was made during the last of a series of meetings convended to discuss the introduction of a VAT-style tax, possibly at a rate of 5%. According to Senator Philip Ozouf, the new levy will cost £1.75 million and require an additional 30 tax staff to administer.

"There is the cost of ongoing collection, which comes from local retailers,” observed Finance and Economics Committee president, Senator Terry le Sueur. “And we want to ensure that sales tax would not be abused by people shopping on the internet and avoiding local retailers."

Last month Jersey’s government announced a package of tax reforms, the main emphasis of which will be to shift the tax burden from companies to individuals after the government ushers in a proposal to slash corporate tax rates to zero.

Other measures in the reforms include the axeing of income tax allowances for households with an income greater than £80,000 per year, which will commence in stages from 2005.

Further measures have also been suggested to claw back revenue lost from the shrinking of the company tax base, such as a new 10% levy on the profits of financial services firms.

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