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, September 20, 2011
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.
Posted by JERSEYattac at 8:58 AM