Giba, the umbrella association of the finance industry bodies, wrote to all States members on Wednesday, warning of the damage it believed would be caused to the island’s captive insurance, fiduciary and funds sectors by the introduction of such a tax.
Territorial tax has consistently been promoted by Policy & Resources presidency hopeful Charles Parkinson, and is believed to be supported by many of his ‘fair tax’ grouping of election candidates.
Forward Guernsey deputy-elect Rhona Humphreys, a director of fiduciary and fund business Imperium Group and former chairwoman of the Guernsey Association of Trustees, said she was ‘very pleased’ to see the Giba statement.
‘I’ve been concerned about a territorial tax for probably the last 15 years, and I actually raised that with Deputy Parkinson during the election period,’ she said.
‘Even if long-term it is successful, the period of it being introduced and the disruption that could cause, it could really cause our industry – or at least our new business – to move away to Jersey.’
Haley Camp, a new deputy with more than two decades of experience in finance, including a stint as chairwoman of the Guernsey Investment & Funds Association, said she was in agreement with Giba that territorial tax was not the way to move the island forward at the moment.
‘I think there is now some work to do, because I think without the interference of Donald Trump we would have been moving into a territorial tax world in general.
‘He’s clearly put the stoppers on that, which makes it much more difficult.’
She said there were things the States could do to look at how an element of corporate taxation could be part of a solution for the island’s revenue issues going forward. ‘That’s something the finance industry is supportive of, so I think that’s where we need to focus discussions and make it not just about territorial tax.’
Deputy-elect David Dorrity, who most recently has served as a director of Praxis, said it was positive that Giba had highlighted the ‘dangers’ of pursuing a territorial tax over other options such as GST-plus.
‘The possible effects of a territorial tax on our captive insurance industry and funds, and where it interfaces with trust, I’ve worked in trusts all my life and that was new information to me,’ he said.
‘The fact it was going to harm any part of our finance industry was a step too far for me.’
He said it was ‘incumbent’ on the new Assembly to ensure islanders were sufficiently informed on the details of the GST-plus package the States is currently under direction to implement in 2027.
‘I can’t tell you how many times I’ve sat down with someone and explained it and they all pretty much say “no one ever explained it like that to me, that doesn’t sound too bad”.
‘We have to make sure our people understand better what it is.’
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