Minister rejects immediate business tax rise

Elaine Millar: Jersey tax mix not unusual

Jersey's Treasury Minister Elaine Millar has said she has no “immediate plans” to increase business taxes.

The standard rate of company tax in Jersey is 0%, while finance firms pay 10% under a system known as 'zero/ten'.

The government collects tax on income and 5% on goods and services, but does not collect capital gains or inheritance tax.

Taxes on wages and salaries account for a higher proportion of government revenue in Jersey than almost anywhere else in the world, according to Statistics Jersey.

'Rebalance' tax system

In an exchange in Jersey’s States Assembly, Deputy Geoff Southern asked Mrs Millar whether the government was considering following the Isle of Man, which last month announced a 2% rise in income tax to improve frontline health services.

He urged the minister to “rebalance” Jersey’s tax system, to reduce the burden on individuals.

"The emphasis on individual taxation overweighing all of the business taxation is a matter that needs to be discussed," he said.

"At the moment the middle earners and the low earners are paying disproportionately too much. It is time, I believe, to examine our business tax as well."

Deputy Jonathan Renouf, meanwhile, asked whether Mrs Millar would consider “broadening the tax base by looking at other taxes other than just income tax and taxes on spending".

'Safeguard its future'

Mrs Millar said: “We are reliant on income tax rather more than some other jurisdictions but our tax mix is not unusual for an international finance centre and that contributes substantially to our overall tax revenues.

“Additional taxes could impact significantly on the international competitiveness of the finance centre and introducing those types of taxes is not being considered by the government.

“I do not have immediate plans to look at business taxes.

“Nothing can be ruled out, but it is not on the table at the present day.”

Mrs Millar said people in Jersey pay “significantly less income tax than people in the UK”, while the 20% standard rate of VAT payable on most goods and services in the UK, she said, was higher than the 5% GST charged in Jersey.

She pointed out that large multinational companies with a group turnover of more than €750m (£650m) would be taxed 15% from 2025, to meet reforms to international taxation rules approved by the G20 in 2021.

Jersey Finance, which promotes the island's finance industry, said: "We welcome the Government of Jersey’s longstanding commitment to maintaining the island’s reputation as an attractive jurisdiction for international investors based on tax certainty and simplicity, whilst meeting global standards.

"The industry’s international competitiveness is essential to safeguard its future success and protect the significant government revenues the sector contributes through both direct and indirect tax contributions."