KPMG Expert Echoes Reassurances Over IOM Tax Plans

27 June 2002

According to a report in the Jersey Evening Post on Tuesday, local tax expert John Riva has echoed Finance and Economics Committee President, Senator Frank Walker's reassurances with regard to the recent announcement that the Isle of Man plans to introduce a zero corporate tax rate.

The newspaper revealed this week that the KPMG Tax Partner told delegates attending the Channel Islands conference of the Association of Chartered Certified Accountants that the announcement is unlikely to spark an exodus to the Isle of Man, but warned against any increase in Jersey's 20% corporate rate.

'Not many companies will leave Jersey if it keeps the 20% corporate tax - they will just sit down with the Comptroller of Income Tax and negotiate. There are sufficient structures in place to faciliate low tax for new businesses,' the JEP quoted Mr Riva as observing. However, he warned that: 'If corporate taxation is increased, companies will move away.'

Mr Riva suggested that the States Authorities need to consider broadening the Island's tax base in terms of income taxation rather than by introducing a VAT system, arguing that the costs inherent in the latter option would be considerable.

'At the moment 50% of the population are paying 4% or less tax,' he told delegates.'Jersey needs to broaden the tax payers' base so that people feel part of the system. If people feel that it's their money, they start to question how it is being spent.'

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