Guernsey right to embrace new tax playing field

Indeed it is very likely that the Guernsey authorities – while outwardly playing the ‘wait and see’ game – will seek to accept the move, driven by the OECD, with a degree of enthusiasm.

Policy & Resources treasury lead Deputy Mark Helyar said that Guernsey was continuing to work closely with the OECD on international tax matters, participating at every stage of the discussions, to represent the interests of the islands.

Of course we are, and have been, doing so. There are a number of good reasons for it.

Guernsey has always done its best to stay on the right side of the tax line, even when others clearly believe that it is not. If the island is engaged in this global tax debate, it demonstrates that we are prepared to do the right thing. If some international politicians and campaigners want to believe that we have been brought to the table kicking and screaming, then that is a view they may take.

Secondly, a global corporate rate may help to resolve our own tax and financial woes. P&R has conservatively allowed for a £10m. annual boost to corporate coffers when the new rules come into effect. Too conservative? The committee believes that with the full detail of the implementation to follow, but various carve-outs inevitable, not least Guernsey operations already paying significant tax, that the move will not make a massive difference to island revenues.

This global tax move should be seen to signal a change in mindset, both locally, and globally.

In Guernsey it’s very likely that our change will be steady and gradual, while compliant. We won’t want to scare the horses. We will want to protect what we can, while recognising and swimming with the global flows.

If the need for change is recognised – which it is – and applied properly, and our now well-practised stance of swaying with global breezes should serve us well here, Guernsey could make some gains, and mitigate losses, on the new playing fields of global taxation.