{"id":16811,"date":"2012-08-08T11:27:13","date_gmt":"2012-08-08T10:27:13","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=16811"},"modified":"2012-08-08T11:27:13","modified_gmt":"2012-08-08T10:27:13","slug":"jerseys-black-hole-is-getting-deeper-just-as-i-predicted-way-back-in-2005","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2012\/08\/08\/jerseys-black-hole-is-getting-deeper-just-as-i-predicted-way-back-in-2005\/","title":{"rendered":"Jersey’s black hole is getting deeper – just as I predicted way back in 2005"},"content":{"rendered":"

When Jersey first planned to move to a zero percent\u00a0corporation tax system, with funds lost being\u00a0replaced by a sales tax equivalent to VAT I predicted two things<\/a>\u00a0relevant to what follows.<\/p>\n

The first was that the fiance industry would not grow at anything like the rate Jersey then forecast. That growth forecast was critical to filling the tax gap Jersey\u00a0intentionally created.<\/p>\n

Second, I predicted as a result that the new sales tax - called GST - would be charged at much higher rates than the 3% \u00a0first proposed. Indeed a few of us had a wager on what it would be a decade later - my\u00a0forecast being 12.5%. This, I said, would be necessary to fill what I called a 'black hole' in Jersey's finance<\/a>, which it was easy to\u00a0predict would reach \u00a3100 million a year.<\/p>\n

The GST rate has already risen from 3% to 5%, hitting\u00a0the\u00a0poorest\u00a0in the\u00a0island hardest, of course, and all with the intent\u00a0of\u00a0subsidising the tax abuse industry located in the\u00a0island.<\/p>\n

So it was interesting to note a report in the Jersey Evening Post yesterday saying<\/a>:<\/p>\n

GST could double by 2015 if ministers\u2019 \u2018highly optimistic\u2019 economic recovery targets are not met, employers have warned.<\/p>\n

The Chamber of Commerce say that if the economy remains flat over the next three years, a new \u2018black hole\u2019 of \u00a367m will open up \u2014 the equivalent of raising GST to almost 10%. And the business lobby group says that with spending rises planned from 2013 to 2015 under the Medium Term Financial Plan after three years of cuts, the question is \u2018are we really in control of States spending?\u2019.<\/p>\n

The States three-year spending plan proposes a 12% rise in department budgets by 2015, along with \u00a3222m worth of capital spending. Although no tax rises are proposed, a further \u00a326m per year will be found for the Health department \u2014 and ministers say that they have balanced the books, with a small surplus of just under \u00a31m predicted over the period.<\/p><\/blockquote>\n

Those employers are right:\u00a0Jersey cannot and will not balance its books. It's\u00a0trust business is under serious threat<\/a> now due to new US and UK laws. Even its tourism is down<\/a>. Jersey's economic model has failed, as I predicted. And the people of Jersey will pay a very high price for it.<\/p>\n","protected":false},"excerpt":{"rendered":"

When Jersey first planned to move to a zero percent\u00a0corporation tax system, with funds lost being\u00a0replaced by a sales tax equivalent to VAT I predicted
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