Senator Walker: EU ‘backtracked on zero-ten tax’

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EU ‘backtracked on zero-ten tax’ ¬ª News ¬ª This Is Jersey.

The JEP notes:

JERSEY was given ‘green lights all the way’ on zero-ten, according to former Chief Minister Frank Walker.

He says that when Jersey was proposing the zero-ten corporate tax system in response to EU pressure on tax-exempt companies, both the UK and Ecofin — the EU Economic and Financial Affairs Council — had approved the plan.

And he's right: in 2003 there is no doubt that the Crown Dependencies asked if a general tax rate of 0% with 10% on a restricted range of financial institutions was acceptable in principle - and they were told it was.

The trouble was, none of them declared that they were moving the 'ring fence' that meant locally owned companies paid tax and non-resident owned companies did not out of corporate tax and into the personal tax regime. That was not disclosed: I know, I went to Brussels to find out in 2006 and was told this was not known.

So I note that:

Mr Walker backed current Chief Minister Terry Le Sueur’s position that the EU had ‘backtracked’ over the tax system.

But I could only agree that:

‘There is absolutely no question about it — Jersey was given green lights at every stage of the process,’ said Mr Walker, who retired from the States last December. ‘We got the green light at every point that we needed it, from the UK government, from Ecofin which was the body responsible for agreeing or not the new tax measures. We were getting green lights all the way down the line.

if the evidence is tabled that proves it.

Without it the claim that:

‘But we have to accept that the member states find themselves in an unprecedented situation. They have had to make colossal changes including bailing out banks and running fiscal stimuli that they would never have dreamed they would have to do three or four years ago.’

is right now a lame political excuse to cover up the fact that Jersey could never have had its zero ten system approved - precisely because there was no mechanism to do so until it was enacted - and then it takes a year or so (21 months in the case of the EU rejection of the Isle of Man scheme introduced in January 2006). In which case all the claims that the system was approved were wrong - it never was, and I can see no way it could have been.

But put documents on the table that show it was approved - finally and completely as was boldly claimed by Walker and Le Sueur - and of course I'll accept I'm wrong, and apologise.

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