Gibraltar Government Speaks Out On Tax Reform Plans

by Jason Gorringe, Tax-News.com, London

16 January 2003

The Gibraltar government has responded angrily to the Opposition's suggestions that it has been excessively vague regarding its business tax reform plans.

In a statement released this week, the government announced that:

'There was a recognition, very early on [in] this process by the government and the Finance Centre Council that the transition from the current to the new tax regime would inevitably result in a degree of unavoidable uncertainty in the market place. There was and is, no course of action open to Gibraltar that avoids uncertainty during the EC approval stage.'

'For that reason, the government does not intend to respond, in its own political interests to some of the current political comment and implied criticism. It is simply not possible for this matter to be successfully managed on the basis of a blow by blow analysis and argument in public of the detail of each procedural step and document. The effect of that on the market would be devastating and much worse than the current level of uncertainty.'

The government statement also sought to quash speculation as to whether its tax reform proposals will be rejected by the European Union under its State Aid regime:

'There is, of course, no guarantee that the scheme will be cleared by the EU. This is the process upon which government is currently embarked. However, the government's European legal advisers, and the UK government are of the firm view that the scheme complies with State Aid rules.'

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