Gib Government Slammed For Communication Failure

by Jason Gorringe, Tax-News.com, London

27 June 2002

In the wake of the Isle of Man's announcement on corporate taxation earlier this week, Gibraltar Liberal Party Spokesman for Trade and Industry, Dr Joseph Garcia has slammed the Rock's government for failing to keep the Opposition informed on similar tax reform plans currently in the pipeline for Gibraltar.

Accusing the government of sending out conflicting messages, Mr Garcia noted that:

'The Opposition recall that the Gibraltar Government has taken the view that there is no need to comply with the European Union Code of Conduct on Business Taxation because it is a political agreement, and not a legal requirement. The same position was explained to the House of Assembly recently.'

However, he added that: 'The Gibraltar Government announced in the budget this year that it was their intention to remove company tax on business profits and to replace it by an alternative charge in respect of which they refused to give any details.'

Hitting out at the government's claims that the United Kingdom was advising other jurisdictions to emulate Gibraltar on this issue, Dr Garcia observed wryly that: 'If what is being planned here is the same as the Isle of Man, it would appear that the Isle of Man has got there first.'

He concluded that: 'It is important to note that the Government has refused to reveal any of the details of what they propose, even to provide it on a confidential basis to the Opposition. We are thus unable to say at this stage whether the measures can be supported or not.'

According to the Iberia news service, the Liberal Party Spokesman also expressed concerns as to which sectors will bear the brunt of paying for the removal of corporate taxes, observing that in the Isle of Man, the financial services sector is almost exclusively responsible for paying the balance, despite the fact that the Crown Dependency also has a thriving manufacturing sector.

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