Jersey Faces Tough Choices On Tax Says Deputy Voisin

by Jason Gorringe, Tax-News.com, London

11 April 2003

The president of Jersey's Economic Development Committee, Deputy Gerald Voisin, has warned of tough times ahead for the jurisdiction as a result of tax reforms brought about by new European rules, according to a recent report from the Jersey Evening Post.

Speaking to the Chamber Of Commerce, Deputy Voisin explained that the island would have to soon start looking for "a credible alternative tax" to replace revenue lost as a result of the EU regulations. Voisin suggested one alternative could be the levying of VAT, which he pointed out is imposed in many other offshore jurisdictions, and provides the added benefit of flexibility in changing economic conditions. Voisin also predicted that Jersey will almost certainly have to eliminate corporate tax to keep "business in the Island that is currently held under exempt company and international business company regimes".

Certain sectors of the economy can no longer rely on state intervention for help, the JEP quoted Deputy Voisin as observing. The film industry was one example given of funds being requested which are simply not available. However, he said that resources would be forthcoming for the finance industry, which he described as the "heart" of the economy, making up some 70% of the Jersey's total output.

The island's willingness to participate in exchange of information, which he said would aid transparency in the banking sector and show other countries that the jurisdiction has nothing to hide, will also benefit Jersey in the longer term, he told the Chamber.

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