Jersey's Business Community Condemns VAT Proposals

by Jason Gorringe, Tax-News.com, London

30 August 2002

A prominent Jersey businessman has warned the States authorities against introducing a tax on goods and services without first reducing inflation levels.

Speaking to the Jersey Evening Post on Wednesday, Roger Bisson, head of a local e-business consultancy firm suggesed that although the Jersey Finance Industry Association (which recently put forward the VAT proposals), banks and lenders stand to benefit from the introduction of a sales tax, the 'overnight' increase in the cost of goods would adversely impact on small businesses and consumers alike.

'It would therefore appear that by suggesting the introduction of even a simple system of VAT, the finance industry continues to neglect the issue of inflation for which it is largely responsible and further proposes to introduce new taxes and schemes that, while beneficial for the finance sector in the short term, have the potential to damage businesses in all sectors in the longer term.'

He then told the JEP that the Island needs to focus on reducing inflation in the short-term, and take a longer-term view of restructuring the jurisdiction's tax system.

'As salaries are a significant source of inflation, it is perhaps more appropriate for higher personal income taxes, given that most of government expenditure is in the form of local amenities and personal services,' he suggested.

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