I am amused by an article in the Jersey Evening Post today. It says:
Thousands of jobs could go and hundreds of millions in tax revenues be lost if the States were to tinker with the Island’s tax system.
That is the stark warning issued by the body responsible for promoting the finance industry. In a shot across the bow of backbenchers, Jersey Finance has spoken out as it fears the effects of amendments that might be put forward to the Budget in December.
Jersey Finance chief executive Geoff Cook said that stability is the cornerstone of what Jersey has to offer as an international finance centre and even reports of potential changes to the tax system can inflict both damage to the Island’s reputation and business interests.
So here is Jersey, running a tax system that the EU has suggested to be illegal and which is in urgent need of reform whilst at the same time it is rapidly heading for insolvency due to the massive black hole in its finances which amounts to at least 20% of its annual budget, and then along comes the state financed quango whichthe finance industry in the island refuses to support saying that whatever happens no change must be made which threatens the finance industry, even if at the cost of the complete breakdown of the government of the island.
You can see that they've got their priorities right, can't you? Blow everyone who lives on the island, and their well-being, tax abuse comes first.
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Jersey is heading for insolvency…how much public debt does it’s have and what sort of percentage is that of GDP? I presume it is alot worse than the UK?
What’s that old saying about supping with the Devil needing a long spoon?
@John Buckles
Irrelevant
A person with no means of repayment cannot borrow
The UK can repay
Very, very different
And you can’t reapy because you will not / cannot tax
@Richard Murphy
I didn’t ask your opinion on their ability to pay…I asked what their financial position was and how it compared to the UK?
Illegal? Can you elaborate Richard? Jersey isn’t in the EU, so how is it’s tax system illegal?
@Slim
As I presume you well know the UK is responsible for the foreign affairs of Jersey and as such it is entirely responsible for imposing the requirements of the EU on Jersey and for ensuring that Jersey complies with them
The idea that jersey is in some way independent of the UK is a complete mockery. It is not. It is a Crown dependency, self-governing with the consent of Westminster, that could withdraw it at any time.
In the case of course the EU can say that Jersey’s tax laws are illegal, as they are
@John Buckles
I really do not care what you asked, I told him what you need to know – and that is that without substantial taxation reform your government is massively overspending and has never proven itself able to cut back spending, for the good reason that the people of Jersey (you know, the ordinary ones who really live there) need those services.
In that case the only way in which Jersey can balance its books is by raising tax, but it is quite clear the finance industry is objecting to any significant tax change, unless it is imposed on those same ordinary people in Jersey who have no capacity to pay because of the exceptional cost of living in the island, imposed upon it by the finance industry
So in other words, the island has no capacity to service debt and therefore cannot borrow, which is all you need to know. I presumed someone the financial services industry would be able to appraise a credit application, but it appears you are unable to do so. No wonder you are in a mess
And that, I can assure you, is an extremely accurate description of where you are – and so far you are providing convincing, and ongoing evidence that you are intent on going bust, and will do so
Much as I forecast in 2005, I might add
@Richard Murphy
I’m not aware that the UK is responsible for the foreign affairs of Jersey, or that it’s responsible for imposing the requirements of the EU. How does that work, how can the EU impose anything on Jersey, when Jersey isn’t a member of the EU?
That doesn’t appear to answer the question anyway. I’m aware that a review is required to see if Jerseys tax system is compliant with the EU code of conduct. I’m not aware of the results of this, but I didn’t think the code of conduct was legally binding either? I’m also not sure how it’s current tax system can be deemed illegal. Illegal where? Not in Europe and Jersey sets its own law. The tax laws may be deemed harmful, and against the code of conduct, but Illegal? Please expand?
Utter rubbish ! Withdraw consent at any time? Where on earth do you get that from?
“The idea that jersey is in some way independent of the UK is a complete mockery. It is not. It is a Crown dependency, self-governing with the consent of Westminster, that could withdraw it at any time”
10% GST (as opposed to 3% at present) raises an extra £100m a year. Problem solved.
A territorial tax system with a 10% rate for all companies raises far more. Problem solved – also EU code-compliant.
If Jersey was in the state its in AFTER those changes then yes it would have a problem.
And how exactly is the UK planning to repay its own national debt?
For Jersey also read (in many instances) the Isle of Man.
When will these wretched islands be finally bought under proper control and law and order established to allow the decent, honest populace to lead a life away from the clutches of a rapacious financial services industry.
That this “industry” provides employment has no ethical claim.
@Slim
well you may not be aware of this, but the EU certainly are, as are the UK, which is exactly why the EU required that the UK impose its mandate upon all the Crown dependencies and all the overseas territories
If you wish to live in your delusion state thinking that you are an independent country, feel free, but the reality is that no one thinks that outside the goldfish bowl in which you live
I will tell you one place where they don’t – and that is the justice ministry in London – where the civil servants who I speak to do laugh at the pretentious representations made by town councillors from St Helier representing themselves to the ministers
and as for whether the code of conduct is legally binding or not, again, who cares? Realpolitik suggest you must comply, whether you like it or not, and so comply you will – as your politicians know they must
@Rupert
Ah, it’s good to see that you’re back into opressing the ordinary people of Jersey in Guernsey again Rupert. Keep up your usual stock in trade. Anything to preserve the elite, eh?
@Richard Murphy
I don’t think you’re up to date on the UK’s responsibility to represent, the dependencies have been representing themselves recently to Europe.
On the point of illegality, I think it highlights the difference between the facts as they stand and your biased reporting. These countries do not have illegal tax systems, you claim they do. You’re wrong.
Richard
Not at all.
How can imposing a rate of GST/VAT on local residents of half the average rate applicable in the EU be oppressive?
How can imposing a rate of corporate tax of 10%, being a rate expressly approved by the EU for its member states over the past 2 years be oppressive?
And we aren’t even part of the EU!
As for your comments to Slim – total garbage. Have you not actually read the Justice Commission’s Report from last year? Which bits of it do you not understand?
Your personal hatred of the Crown Dependencies is now coming through loud and clear as a vendetta. Nothing less.
@Slim
I’m up to date all right
I read the EU
I read what is required
I ignore Select Committee reports with no standing
And I ignore statements issued from Whitehall solely to allow the CDs to sign TIEAs
I see the reality
It’s wise to do so
Folly to ignore it
Again, you’re dodging the issue and typing fluff. This just exposes your mis-reporting and bias vs the dependencies. They are not in the EU, how is their tax system illegal?
“He would, wouldn’t he?” Mandy Rice-Davies, British call girl
Of Lord Astor when told that he had repudiated her evidence at the trial of Stephen Ward — 29th June 1963.
And later: “My life has been one long descent into respectability.”
All very negative about Jersey again Richard, but I guess we cannot expect anything else from you and your blog nowadays. Means nothing to us working in Jersey though.
@Slim
I didn’t type fluff
And the reality is zero ten as enacted is, and always has been in breach of the EU Code of Conduct
Now the Code is only de facto law, I agree
But it has the effect of requiring ;legal compliance
And Jersey has accepted the need to do so – which is why Colin Powell was in Brussels pleading his case (without success) on Sept 23
Now why am I wrong?
@Matt
Of course – that’s what the Isle of Man said about me and then lost their VAT subsidy
And that’s also why your zero ten has been rejected
I have a strong suspicion that without me and my colleagues and friends it would have gone unchallenged
Your bluster is seen through on this occasion
You’d be better off changing your tune
@Richard Murphy
You’re wrong because the zero/10 tax system is not illegal. It *may* be against the spirit of the EU’s code of conduct which is something that’s yet to be confirmed. There is a review that is incomplete. That’s the current status, which isn’t how you described it.
Richard
You say that you ignore Select Committee Reports with no standing. What you actually mean is that you ignore reports which don’t agree with your view. You disagree with the constitutional history of the Channel Islands because you don’t like the result. After 806 years you should be able to “move on”.
Yet you apply great weight to the application of the EU Code of Conduct to non-EU members who couldn’t become members even if they wanted to, and you say we were always in breach of the Code of Conduct when we clearly were not. It is highly subjective whether we were even in breach of the spirit of the Code of Conduct and even that decision has not been made!
So you ignore official constitutions and UK official government reports which unequivocably do apply to us, yet place enormous weight on Codes which unequivocably do not, unless we choose to voluntarily accept them.
So precisely how does that work then?
@Rupert
I have answered you, endlessly
You’re living in a fantasy: your own politicians know that
Please do not bother to write more about the tooth fairy here – I’m not interested in hearing any more of your myths
@ Rupert
I’m just a lowly manual worker in Jersey so struggling to understand all this.
If as Rupert says the EU or the UK cannot enforce anyhting on us why did we adopt zero ten which has created a massive black hole in our finances. Why didn’t we just stay as we were, we wouldn’t have needed GST and 20 means 20 etc as we were doing quite nicely before zero ten?
@David
Well asked
And exactly right
David and Richard
We adopted zero-10 because we were asked to change our tax regimes. We were not told to, we were asked to. We were not obliged to comply. We chose to comply. We could have declined. It would have resulted in added pressure on us. The EU and the UK can only ask us, not force us, as we are not part of the UK and not part of the EU. Neither can legislate for us without our consent. Anybody claiming otherwise is wrong. Fact.
Voluntarily complying is part of wanting to be viewed as a co-operative jurisdiction.
@Rupert
More cake and eat it then?
Without wishing to appear cynical … it appears that Jersey is selective about “compliance” with both UK and EU law/regulation.
Should government “risk assessment” dictate “comply” then Jersey complies. If not Jersey ignores it.
A fortunate position for Jersey – but not the rest of the world.
There; the PSG has written Jersey five times – well that will appeal to your over inflated ego!
@Rupert
I am sorry – but you’re either lying or you have no idea what you’re talking about
The UK imposed this on you at the behest of the EU and you had no chocie but jump
End of story
@ rupert
So you are saying we chose to create a 70 million plus black hole in our economy, not because we had to, but because we chose to?
Why would anyone want to do such a daft thing if as you say they didn’t have to?
I just can’t fathom this out, I assumed we were instructed to change our tax regime. If you’re right Rupert our government chose to create a massive black hole they are now struggling to fill by very unpopular means with middle Jersey up in arms over school fees etc.
I suppose the question I need answering is why did we do it if we didn’t have to Rupert. We seemed to be swimming in cash only a few years ago and now we’re skint, why did we “choose” to do that to ourselves?
David
Has it occurred to you that we do not wish to be an enemy of the EU?
We were made aware that the EU didn’t like our tax regime and had “apparently” approved the replacement regime. The plan was to use existing reserves to absorb the corporate tax deficit until normal economic growth replaced the deficit. As we now well know, “normal economic growth” was nothing like what emerged, and so we gave the big deficit today.
Everybody knew that there was going to be a black hole for a few years. That isn’t the issue. The issue is that we were expected to have come out the other side by now, operating under a tax structure which Jersey politicians claimed had been “approved” by the EU.
But the main reason why Jersey is now struggling is because of the reckless public spending over the past 5 years by the States of Jersey.
The UK Labour Government may well have applied extra pressure on the islands – pressure which the islands’ constitutional relationship with the UK makes clear was invalid – but fortunately Labour were put right on their understanding by the Justice Commission Report and are no longer in office to abuse their position.
Rupert,
I think I’m grasping bits of this now, we didn’t HAVE to change our regime but we CHOSE to because we didn’t want to be an enemy of the EU. That makes sense I guess, but doesn’t it mean we will have to choose to jump again if they move the goal posts? Surely if we decline we’ll become enemies of the EU?
Your argument that we don’t have to do anything the EU or UK say as they cannot force us, is a bit weak when you then admit we didn’t really have a choice as we need to remain friends with the EU. It looks like we have no choice, admittedly legally we may have a choice but in reality our past behaviour says we don’t.
Oh, wad some power the giftie gie us to see oursels as ithers see us!
R. Burns
So how do others see the governments of offshore “secrecy jurisdictions”?
Isle of Man: An overweight farmer perspiring inside a heavy tweed suit as he deliberates the completion of an EU sheep subsidy claim – even though the island is not a member of the EU and he hasn’t any sheep!
Jersey: A dapper chap in silk cravat, blazer and flannels and ill-advised co-respondent’s (not correspondent) brogues. Sauntering (on foot or Bentley) to the Yacht Club for a few pink gins and a chitchat about tax evasion — or should that be avoidance?
Guernsey: Shades of Tom Edison, Jr. the fictional character and resident of Dogville — the town featured in Lars von Trier superb film about the exploitation of a (seemingly) defenceless and vulnerable woman. Perhaps a tenuous similarity, but oh what a wonderful ending!
And the PSG?
The PSG is not a government but if it were then Robin Hood with a dash of Dirty Harry.