Jersey puts the foxes in charge of defining the hen-house

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I loved this exchange in the States of Jersey. Deputy Geoff Southern asked this written question:

Given that in his response to my question of 15th July 2013, the Chief Minister pointed out the difficulties of defining what constituted ‘aggressive' tax avoidance and suggested that that this might form part of the remit of Sound Business Committee, will he inform members whether he has asked the Committee to work on such a definition, and if so, when we can expect to see a working definition produced and if not, why not?

Will he further inform members of the constitution, membership and schedule of meetings of this body, and state whether and in what form its findings and actions will be reported to the States?

To which the answer from the Chief Minister was:

I can confirm that the Sound Business Practices Committee has been requested to consider what constitutes ‘aggressive' tax avoidance as part of a proposed wider ‘Code of Good Practice' for the industry. This will build on the good practice that many financial institutions are already adopting. When the Code has been finalised and agreed by the Committee it will be made publicly available. It is anticipated that this work will be completed by year end. As previously advised on the 15th July, the Committee is made of up representatives from government, regulator and industry - specifically the Director of Financial Services, the Director General of JFSC and the Chief Executive of Jersey Finance. Its overall purpose is to identify business practices in Jersey which may conflict with Jersey's aim to be an International Finance Centre which supports only legitimate business and recommend actions to address activities not in line with this aim. The Committee meets monthly or more often as required.

So, Jersey is going to define 'aggressive tax avoidance' and it's asked three financial services executives to do so. This is almost laughable, as is the attempt to claim there is only legitimate business in Jersey. Legitimate, as in the terms of compliant with Jersey law, business is plentiful in Jersey right now. But legitimate business in the common sense meaning of 'does this business have any substance to it or reason to be recorded in Jersey bar the avoidance of tax or the securing of secrecy' hardly exists in the place.

This is a case of asking the wrong people the wrong question in the hope of securing the answer that suits the government's purpose, and not in advancing the issue in any way at all. But there is, of course, a precedent for this now. The UK has done the same - appointing the tax profession to be the gatekeepers of HMRC's right to pursue tax abuse. And we can already see how well that has gone. Jersey's just joining the UK in using tax industry run cover ups for the abuse of that profession.


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