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Guernsey Tax Reform Consultation Closes

by Jason Gorringe, for LawAndTax-News.com. London

22 November 2005

The Guernsey government's public consultation on proposed tax reforms has ended after several months.

In 2002, the Guernsey States agreed that an overhaul of the taxation system was necessary to ensure that the island remains competitive as a low tax jurisdiction and international finance services centre. The centrepiece of Guernsey's Future Taxation Strategy is a 'zero/ten' rate of corporate tax, under which Guernsey's businesses and corporate entities will be subject to income tax at 0% from the 2008 tax year.

However, businesses regulated by the Guernsey FSC will be charged tax at 10%.

The government will need to raise an estimated £48 million to address the shortfall in revenues under the proposed system, and various suggestions have been put forward for how to do this, including a general sales tax, higher social security levies and additional duties on petrol, alcohol and tobacco.

In March and September 2005, the Fiscal & Economic Policy Steering Group issued Consultation Documents setting out “a strategy to safeguard the future economic well being of the Island.”

Following the ending of the consultation period, final tax proposals will go before the States for deliberation in February 2006.

The full text of the Future Economic And Taxation Strategy Document can be found in the Tax News Resources section

 

 






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