Jersey Tax Experts Warn Over Zero Rate Corporate Tax Plans

by Jason Gorringe, Tax-News.com, London

31 January 2003

The Jersey Evening Post has quoted two prominent figures from the Island's finance centre as expressing concern over proposals to impose a zero rate of corporate tax in response to the the EU's code of conduct on business taxation.

Speaking in a recent interview with accounting news service Accountancy Age, former States economic adviser, John Christensen is reported to have described the plans as 'an act of desperation', observing that: 'I see it as no more than a short-termist measure. Before long there will be a reaction to it.'

Mr Christenson went on to add that the Island relies on the finance industry for more than 90% of its income, and that it was this over-dependence which caused his split with the government.

Richard Murphy, Jersey-based chartered accountant and member of the Association of Accountancy and Business Affairs echoed Mr Christensen's concerns, predicting that if the move goes ahead, the jurisdiction will 'self-implode within three years' due to its staggering dependence on corporation tax.

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