Why not tax all firms at 5%?
COULD someone in the government of Guernsey please advise why the States cannot consider imposing a company tax rate of 5%? This would be far better than imposing GST, which would affect those who can least afford to pay. With an ageing population and declining tax revenues, indirectly taxing all of us for more and more services makes this a very expensive island to exist on and I cannot for the life of me understand why this is not put forward as a consideration. Surely even the greediest of people have to understand that as an island we cannot continue to tax companies at 0% and I am certain that within the business community there would be a willingness to pay company tax at a 5% rate. After all, more and more international companies are being urged to follow the moral high ground and pay something off the back of massive profits.
SIMON SMITH
Les Landes,
Rue des Landes,
Forest, GY8 0DB.
Editor’s footnote: a spokesman from Policy & Resources replies:
Following the introduction of a 0% standard rate of tax for companies in 2008, additional revenues are collected from businesses through increased employer social security contributions and increased commercial tax on real property.
Since 2012, the Treasury and Resources Department, and now the Policy & Resources Committee, have embarked on seeking to widen the coverage of the intermediate (10%) income tax rate which was originally introduced only for banking activities, and also the higher (20%) income tax rate. Over the last seven years, this widening has resulted in the generation of an additional £10.6m. per annum for the Guernsey exchequer.
The Policy & Resources Committee continue to closely monitor the appropriateness of the corporate tax regime, having due regard for the need to provide a stable platform, maintain business confidence, support and encourage financial services and to retain an internationally acceptable and competitive environment for the island’s businesses and will report back to the States should it consider any changes are necessary.