Gib Opposition Slams Government For Defeatist Attitude Over Savings Tax

by Jason Gorringe, Tax-News.com, London

13 February 2003

In a statement released on Wednesday, Gibraltar's Opposition Alliance defended its stance on the EU's Savings Tax Directive, and slammed chief minister, Peter Caruana for 'saying one thing one day and another the next.'

Commenting last week on the likely impact of the European Union Directive - given that the UK has decided to adopt automatic information exchange and that Gibraltar was not included on the list of dependent territories which will be allowed to decide for themselves whether to adopt information exchange or a withholding tax - the Rock's authorities observed that:

'If despite the government's efforts, HMG continues to decline to [defend Gibraltar's interests] then the directive will apply to Gibraltar and there is nothing that the Gibraltar government can do about it. At that stage Gibraltar has the choice of either accepting the position or trying to mount a legal challenge to the Directive.'

'Both have collateral implications for the finance centre which government is considering with the Finance Centre Council and the Gibraltar Bankers Association.'

However, the Opposition Alliance has criticised the government for its defeatist attitude on this matter, arguing that capitulation is not an option.

'It is not surprising that the Chief Minister was not successful over the EU Taxation of Savings Directive. Before Mr Caruana boarded the plane for London the European Commission had already confirmed to the Opposition in writing that Gibraltar would not be given the choice of exchanging information or applying a withholding tax,' the Opposition statement revealed, continuing:

'As the Opposition had predicted last week, Mr Caruana has come back from London saying that he has done everything he can on the matter. The Opposition do not accept that the options of crawling to the British government or of capitulating on this issue, as given by Mr Caruana, as the only two options open to Gibraltar.'

However, the Opposition did not, in its statement, provide any potential solutions of its own.

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