Attac Jersey is a Member of the International Tax Justice Network. We are Members of the Association for the Taxation of financial Transactions for the Benefit of Citizens, (ATTAC) and the Tax Justice Network, (TJN). The aims of both organisations are to research, educate and campaign to further public awareness. We are seeking to alleviate poverty through the creation of just taxation systems to fund social goods.
Tuesday, November 8, 2011
Title - Who is paying for Jersey to be a tax haven? From - Tax Research UK, Director Richard Murphy.
Letter to the Editor of the Jersey Evening Post 19.9.2001
The long-term future of all Islanders is precisely what motivates us.
Just for the record on the subject of the Zero-Ten Tax Policy. In the final
paragraph of your editorial (Wednesday 14th September) you describe Zero-
Ten's opponents - "few of whom appear to have the Island's best interests
at heart". What nonsense! It is precisely the long-term future of all Islanders
that has motivated many opponents.
Clarity is essential here. Europe was not happy with an unfair system where
local businesses paid tax and other businesses did not. Now this particular
aspect of taxation has been harmonised and so the EU seems happier. What
opponents of the Zero-Ten Tax Policy say is that as a consequence of Zero-Ten
a Goods and Services Tax is being imposed on the Island population to fill the
coffers. The people must pay. Business need not. This is where the unfairness
lies. The EU is not concerned about how this money is raised; internal policy is
not their worry. That is for the States of Jersey to decide.
And what are the long-term interests of Islanders? I would point to the obvious -
a variety of jobs from which to choose, fair pay, fair rents or a house to live in that
doesn't cost the earth, time to relax and laugh, not just putting forward our points
of view but being seriously heard and so participate in the democratic process.
As one Jersey lady once told me - we have free speech but nobody is listening.
Could she be right?
Letter to the Editor of the Jersey Evening Post. 19.9.2001
Opposers have been vindicated on zero-ten policy.
Your editorial “Vindication for zero-ten tax policy”( 14th September) is remarkable for
the extra-ordinary amount of misinformation contained in it.
Your editorial writer simply failed to explain that the zero-ten policy just approved by
the European Union is not the zero-ten policy which they declared was against their
Code of Conduct.
It was the original zero-ten plan that I and others claimed over the years would not
be accepted by Europe. And we were right.
Back in 2002, Europe told Jersey, Guernsey and the Isle of Man that the zero-
10 proposal presented to them did comply with their Corporate Taxation Code of
When Europe later declared that it was not happy with the original zero ten
proposals, Jersey authorities made the excuse that “Europe changed its mind,
having first approved it and then disapproved it”. That line was also peddled by the
then Bailiff of Jersey, Sir Philip Bailhache, in one of his many forays into the political
Senator Le Sueur later let the cat out of the bag when he admitted that only the
bare bones of the proposal was put forward to Europe, it did not include the “deemed
dividend section” and it was only an “in principle agreement awaiting further detail”
When Europe saw the “deemed dividend section” it considered this and declared
that it breached their Code of Conduct and was unfair and discriminatory.
Which is what I and others had been saying for several years and been condemned
for doing so by the Le Sueur/Ozouf group of politicians who claimed hat we did not
know what we were talking about.
Having put Jersey’s finance industry into a position of great uncertainty for over a
year, with the subsequent loss of business, the politicians responsible for this fiasco
realised that the only way out of their difficulty was to alter the deemed distribution
section so that shareholders in Jersey companies would be treated in the same way
as foreign based companies trading in Jersey where shareholders pay no tax on
their profits until they were distributed.
Therefore, to suggest that those who supported zero-ten have been vindicated and
that those who opposed it now have “egg on their face” is totally wrong. We are the
ones who were vindicated by the first European decision...
What your editorial also failed to recognise is that this change to zero-ten is now
going to create enormous opportunities for tax evasion by local shareholders.
It now means that if an individual in a Jersey company builds up a substantial sum of
profits over a number of years and then decides that he no longer wishes to run his
business and sells it he gets all his profits tax free because there is no capital gains
tax in Jersey.
The Chief Minister has already announced that this new version for zero-ten will lead
to a loss of at least £10 million in revenue to add to our fiscal problems. How is this
to be recovered? Another rise in GST?
To suggest that anyone involved in this fiasco that has cost Jersey over £110million
in lost revenue deserves any praise or credit is an absolute travesty and another
excursion into cloud cuckoo-land.
An official inquiry has been launched into Jersey’s role in forcing third world countries to pay millions of pounds in crippling debt.
Chief Minister Terry Le Sueur has revealed that senior law officers, top-ranking civil servants and finance experts have met to look at whether so-called vulture funds should be allowed to use Jersey courts to chase debts.
The funds buy up the debts of developing countries for a fraction of the amount owed and then aggressively pursue the debtors though the courts to recover as much as possible. Some of the debts date back to the 1980s, with nations having already paid back the original figure borrowed several times over.
In the past few weeks pressure has been mounting in Jersey to review the actions of the Royal Court after the UK clamped down on vulture funds.
Campaigners from the UK lobby group, Jubilee Debt Campaign, are now calling on supporters to write to the States demanding action.
In Jersey the issue is being championed by Deputy Daniel Wimberley, who is concerned about a serious risk of major damage to the reputation of the finance industry if the Royal Court is used in this way. He said that the whole thing was ’obscene’.
Wimberley's comments follow a judgment in which the Royal Court found in favour of FG Hemisphere and ordered that the Democratic Republic of Congo pay a debt of $110m. The case is now in the appeal courts, and judgment is expected later this month.
A statement released by the Chief Minister’s department said that the government was aware that the UK wanted to stop vulture funds extracting "harsh and inequitable payments from poor countries for debts that have, in many cases, been bought for a fraction of the cost."
The UK has made permanent a temporary law enacted last year which limited the amount a fund could claw back. The Chief Minister’s statement said that Jersey had been waiting to see what action the UK took before deciding what to do. The Jersey working party hoped soon to submit proposals for consultation.
Bankers and others have been buying up outstanding debts owed by some developing countries and using law courts (including jersey's Royal Court) to enforce payment at the original value of the debt.
What is particularly unpleasant about this practice is that much of this debt had been partially written off through the process of international debt restructuring, which partly explains why the bankers were able to buy the debt cheap in the first place.
In summary, the vulture funds (many of which have bankers hidden
behind them) are forcing poor countries to pay long standing debts
that many of us had hoped were written off.
And they are using Jersey's Royal Court to enforce settlement because -- in the case of Congo -- a partly state owned mining company has a Jersey-based subsidiary.
John Christensen. Director of the Tax Justice Network.
A report by the Tax Justice Network, Jubilee Debt, Christian Aid and Global Witness is due out very soon regarding the extractive industries operating in developing countries, with a particular focus on the Congo.
WHAT an excellent job done on your election survey. Well done, the JEP. It certainly showed how unhappy people are with how we are being mismanaged. We now have the clearest message possible that we, the people, have to bring about big change, and the only way to do this – it will be our last chance to stop the rot and get the useless, inept members out of the States – is to get out and vote for new blood in October. We have been led so far down the wrong road that even with the people of Jersey voting for big change, it will be a long and difficult task. But it must be done, and it is up to us. We have seen that huge petitions, demonstrations and pleas for common sense get totally ignored, and when the damage done is obvious, the perpetrators resign. We have to get rid of dictatorship and reintroduce democracy. October is when we will have a chance to do it. It may possibly be our last chance.
Just mention Jersey as a tax haven and see what reaction you get from Jersey Finance chief executive Geoff Cook. Oh no, Jersey is a well regulated finance centre and definitely not a tax haven, God forbid!
So what has he been telling the Chinese? Talking to top-level Chinese lawyers and private client specialists (whatever that means) so that non-Jersey residents can hold cash deposits or investments without incurring any liability to Jersey income tax. What a well regulated centre it must be (Jersey Evening Post 17th June).
He then explained to the no doubt open mouthed Chinese that the Island offered round-the-clock multi-currency banking and provided leading expertise in estate and succession planning and that - now get this bit - tax neutrality underpinned Jersey's proposition preventing liability for unnecessary layers of taxation.
Does this statement mean that I could pop along to the Tax Office and ask if my tax can be classed as unnecessary? I have an idea what they would say.
He also pointed out our constitutional position to entice the wealthy professionals to use Jersey's financial services industry. Why? What would be the point if we are not a tax avoidance/evasion Island? How would Chinese investors gain? And would they avoid paying tax in their own country?
Oh boy, I can see how China would love that. So just who has he been flannelling? Us or now the Chinese? We know it is a load of twaddle - the Chinese communist government know too and will not take kindly to money being ferreted away in a tiny island somewhere in the English Channel so that some of their wealthy residents can avoid paying their fair share of Chinese tax.
No alternative? Of course there is! We’ve been offered one on a plate.
14th June 2011
Pat Lucas Tax Justice NetworkJersey
In his letter dated 3.6.2011 Mr Boothman seems to suggest that Ted Vibert holds as a central policy that the finance industry has given Jersey more problems than benefits. Well, perhaps he does and perhaps he doesn’t. It’s a pity you turned down his challenge Mr Boothman because now you won’t be in a very strong position to tell us what his central policy is or what he thinks of the finance industry will you?Surely you know that Mr Vibert was simply issuing you with a challenge to publicly debate the motion with him at the Town Hall on the topic “That the finance industry has given Jersey more problems than benefits.”That would have been useful, enlightening and of great benefit to a lot of people.
You point out quite rightly that the finance industry is of pivotal importance to Jersey. It employs thousands of people, contributes tens of millions of pounds to the Island’s exchequer and supports dozens of other firms.All correct.But is this enough? What Mr Vibert was asking, I think, was “What’s the cost of that? Remember, the finance industry in its present form enables the very wealthy and multinational companies to avoid paying tax.Why else would they put their money here?No reason that I can think of.But we, the ordinary people of Jersey are paying heavily for the fact that the rich aren’t paying tax.For example, to make up for the hole in our finances caused by our unfair zero-ten policy that is solely designed to help tax avoiders we have to pay GST which has just gone up to 5%. Many hard working people of this Island as well as the sick and elderly are struggling to cope with the sky-high cost of living while at the same time watching our social services which are far from lavish being further eroded. Those young people who might wish to remain in Jersey see no future here and go away.It seems that little respect is shown for our Island which is being defaced by huge, ugly “iconic!” structures or our people who are permitted free speech but nobody is listening.We all know all this of course but little or nothing is done to remedy a worsening situation. You say that, “…unless someone is doing the baking there will be nothing for the States to slice.” Nice analogy about earning money! We are perfectly aware that we have to earn our living.Please don’t talk down to us.We don’t like it.Neither is it true that Mr Vibert’s policies are nihilistic/destructive or that he is willing to tear down but does not offer any credible, coherent ideas for what he would put in place of what we have now.Have you ever taken the time to ask him what he wants to do?Have you spoken to him?He has already made it clear that he is happy to listen to highly talented men of intellect who are honest and generous with their time such as Richard Murphy, John Christensen, Prof. Prem Sikka and Jacques Harel.
Last January Richard Murphy came to Jersey and at a public meeting offered us a way forward in which we can use the skills and expertise that have been built up over the years in the finance industry.This is a credible and coherent Plan B which offers us an entirely new market that Jersey could exploit. It is the market for a well regulated low tax location where international transactions can be recorded for the precise purpose of ensuring they are not double taxed.
He went into some detail of how this would work and, if implemented, Jersey could become the ultimate transparency jurisdiction for those companies around the world who want to highlight the problems in the world tax system, want to draw attention to them, want to avoid double taxation which is unfair, but who want to be open, honest and accountable when doing so when tackling this impediment to international trade.
We were given this opportunity “on a plate” so let it never ever be said that we have nothing to put in the place of the present system.
This is real alternative thinking:Mr Boothman may not like it because it upsets the status quo.We recognise that all change is uncomfortable, but at least we accept that change is inevitable.The economic model we’ve used is failing.The world will no longer tolerate it.We have to change.We have laid out a pathway for change.What is Mr Boothman’s alternative?That’s what we’re asking and we’re not getting any answers.
Letter to the Editor of the Jersey Evening Post People will vote for vision and verve 9th June 2011 From John Heys There is so much that I could have written about recently that I am swamped as to which subject to choose and, whilst deciding, I am immediately prompted to reply to Mr. ex Finance guru Boothman's letter attacking our next forward thinking Senator Mr Ted Vibert. His letter is so full of erroneous assumptions it is ridiculous. For example, he states that the Tax Justice Network ( note the middle word Mr. Boothman, JUSTICE ) is not as he states hell-bent on destroying all offshore finance centres but is engaged in attacking tax evasion which is destroying the infrastructure of many countries. It is estimated that the UK alone is losing in the region of £90 billion a year, and if Mr. Boothman had taken the trouble to attend the lecture given here in Jersey he would have learnt just what the TJN does from the top man himself, Mr. Richard Murphy, and could have asked any questions and gained facts rather than erroneous opinions. Yes, the finance business is a great asset to our economy, and as our elected leaders have consistently counted our total survival on it pumping in millions of pounds of our taxes to support it, we are now becoming well aware that it is not the golden egg-laying goose that Mr. Boothman would have us believe. For example, where has the £100 million debt come from? Mr. Le Sueur's flash of genius 0/10 move to reduce the finance tax take to only 10% and to make up the loss his next brainwave, the introduction of GST, now at 5%, release the finance industry and hammer the people. But his side-kick Senator Ozouf has stated it should be held at that figure for some time, a statement he has made before has he not, and we all know how hollow that was! When Mr. Vibert started the JDA, of which I was a member, a manifesto was thrashed out and it was very comprehensive and would have been an absolute boon for Jersey. Unfortunately, due to ill health, Mr. Vibert was unable to see it to fruition - not just the action of tearing down the achievements of others. What a silly statement to make. OK. Let's look at other island jurisdictions who are locked into a one-horse race. Just how are they doing? Are they too down 15% on their finance industry? Full of erroneous criticism of Mr. Vibert but he has not got the guts to have a meeting with him to discuss ideas, stating that he holds no brief for the finance industry. Oh well, where did he work? I think that it is a disgrace to accuse Mr. Vibert of merely orchestrating a publicity stunt as a pre-election campaign, and accusing him of only wanting the £45,000 once in the States. I would suggest that this is bordering on downright libel, linked with all his attempts at character assassination questioning his past life in Australia - words like venom, rabble rousing and bringing Island politics into disrepute! Just where has Mr. Boothman been for the last couple of years? Our States have managed that with no outside help whatsoever. How dare Mr. Boothman state that the widely-held opinion of him is that he has nothing worthwhile to offer the electorate. Once again he steps well over the mark, and will be proved to be pathetically wrong in October when the people of Jersey finally stand up and say we have had enough of this shambles, go to the polling booths and vote in men like Ted Vibert who have vision and the verve to see it through.
PATIENTS using Family Nursing and Home Care may soon have to buy their own medical products after the charity announced cuts to its service. In a letter sent to FNHC patients on Monday, the charity's finance director, Andy Cook, said that there were plans to get patients to purchase their own dressings from their local pharmacy. In the letter Mr Cook said that the range of dressings and other medical items distributed by FNHC district nurses would be reduced to 'conform to an agreed list of products between us and Health'. The move has been heavily criticised by Unite union official Nick Corbel, who has warned that patients will be put at risk.
What will happen in the future if you are one of those who require medical products that are currently supplied by Family Nursing & Home Care (FNHC) who have recently announced the closure of their outlet?
Currently you have to join FNHC and pay a membership fee of £50 upwards to be able to access this service, and the scheme includes the provisions of feeding tubes, dressings and incontinence pads for children three years and above. Dietary drinks are also medically required by the person/ patient for their well-being (to keep them alive).. The change in policy means that members will no longer be receiving the service they have paid a membership fee for.
Financial assistance is currently provided to FNHC by Health & Social Services and Social Security Department fund, and there are free medical supplies to under five year olds. Families with children over five years pay 15% of FNHC retail price for the products.
According to the staff of FNHC stores, who received their redundancy notices on Easter Saturday, the outlet closes on the 1st July 2011. One of my correspondents commented that "The staff runs efficient and personal services which believe no private company would, or could provide."
The alternative will be purchasing items required from chemists or other outlets at full cost.
This reminded me very of the true story told by theologian Frances Young, in her book, "Face to Face", and this was about the NHS in England. Cuts there came in earlier than in Jersey, under the regime of Margaret Thatcher and the so-called policy "care in the community", which actually often simply meant State care on the cheap:
Arthur's incontinence has always been with us, and the way we have handled it has really been an extension of the babyhood practice of using nappies. We are geared up to it with suitable washing machines and drying arrangements. But plastic pants became a problem: he got too big for the typical baby-pairs you can get in chemists' shops. We heard from other parents about the supply of disposable rolls and plastic pants. I asked our social worker. She said I could call in at the Community Health centre and pick up what we needed. I could and did. There was a funny old man who would just take your word for it, fill a plastic sack with rolls, produce a couple of pairs of plastic holders and all was fine. We went about every three months. We only needed rolls for school.
Then came the cuts. So what did they do? They employed a secretary to check up on every issue from the Community Health stores. The secretary must have cost more than they saved. The informal arrangement no longer worked. A call from the social worker got us on the list, but then they would only give us a couple of rolls at a time, and we were lucky to get any plastic pants. There was no way we could call frequently enough to get enough rolls for school use. School kept pressing. Other parents were on the laundry service; they had a regular supply delivered every week. Why didn't we apply? Eventually I tracked down the District Nurse and a formal application was put in. We were put on a two year waiting list. Think of it - people coping with incontinent old people on a two year waiting list! They're likely to die before they get what they
That is the trouble with removing a system that works. The alternatives usually require form filling, and bureaucrats checking, and replacing the front-line staff who know the people and their needs, decisions become bedded down with line managers checking decisions at a lower level; instead the whole enterprise, as I am sure will also happen in Jersey, becomes more formal, with forms to complete, assessments to check, before any alternative support is given to the needy.
They now will have to justify their need to clerical staff, rather than it being assessed on a common-sense basis by an organisation which can supply nurses to change dressings, for example, and who will know how people are coping. It is another burden, another hoop to jump through. As Frances Young says:
Professionals are always telling us to keep fighting for our rights, but we have got better uses of our time and energies. What concerns me is not our particular situation, but what it reveals about the stupidity of the whole set up, what it reveals about the hardships more vulnerable people must suffer. And this is supposed to be a caring society. Those who need the care are subject to suspicion and discouragement. They are exposed to unnecessary indignities - like the time my husband and I were sent separate bills to cover the parental contribution to Arthur's care. I hear people from disadvantaged backgrounds, immigrant groups, crying out at the way they are treated and saying this society is racist; I tell them it is not just those with the `wrong' colour skin who suffer in this way in our society. It should not simply be interpreted as racist. Granted that it is worse for them at times because of racist attitudes, it is still a fact that even people like us, white, Anglo-Saxon, Protestant, comfortable, middleclass and articulate, are subject to being treated as non-persons when we present our vulnerable face to officialdom.
There is something about the way state services are organized which creates an 'us' and `them' situation which is profoundly alienating. I am glad that I have experienced something of this, and can stand with at least a small measure of understanding alongside the real poor and inadequates in our society. It is time we realized just how uncaring and inhuman our institutions are. It is time Socialists realized that this is what their ideals have produced -- it has gone bad on them. It is time Conservatives realized that cuts have hurt the most vulnerable members of society whatever they say, and that stopping waste has created waste, and hardship .
And she notes what we will see in Jersey, that more expensive options will be available, and an extra financial burden placed on those who are struggling with enough burdens as it is:
It is since they came to power that supplies for incontinence have mushroomed in Boots and in chemists' shop windows. At last we can get what we need - by paying for it. Society may need handicap, but it will not bear the cost of handicap. The unfortunate are made to feel that they are to blame for their misfortune.
One of the comments on the JEP website is particularly pertinent in this respect:
Someone needs the Nurse opinion on this one as some patients, like my late father have leg ulcer problems and the amount and cost of dressings is extortionate to them. For the old its often a choice between food and electricity or changing dressings regularly. Looks like we'll be back to the old days when the patients had to rewash bandages.!!
"Face to Face", Frances Young, 1986