Jersey’s Treasury Minister Keeps Business Taxes at Low Level Amid International Competition

Minister stands firm against sudden business tax hike in Jersey

Jersey’s Treasury Minister Keeps Business Taxes at Low Level Amid International Competition

Jersey’s Treasury Minister, Elaine Millar, recently spoke out about her plans to increase business taxes in the island. Currently, companies operating in Jersey enjoy a 0% standard rate of tax, with finance firms paying an additional 10% under the ‘zero/ten’ system. The government collects tax on income and 5% on goods and services, but does not impose capital gains or inheritance tax.

According to statistics from Jersey Finance, wages and salaries make up a higher proportion of government revenue in Jersey compared to most other countries worldwide. This has led some individuals to urge the minister to reconsider the current tax system and reduce the burden on individuals. Deputy Jonathan Renouf suggested exploring alternative taxes beyond just income and spending taxes.

Despite these suggestions, Minister Millar emphasized that Jersey’s tax mix is not unusual for an international finance center. She argued that introducing new taxes could impact the competitiveness of the finance center globally. While she did not entirely rule out the possibility of increasing business taxes in the future, she confirmed that there were currently no immediate plans to do so.

In comparison to the UK, Millar highlighted that people in Jersey pay significantly less income tax and have a lower GST rate of 5%, which is lower than the 20% standard rate of VAT in the UK. Additionally, large multinational companies will be subjected to a 15% tax rate starting from 2025 under new international taxation rules approved by the G20 in 2021.

Overall, while some may argue for changes to Jersey’s current tax system, Minister Millar remains committed to maintaining its competitiveness as an international finance center while also ensuring sustainability for government revenue streams.

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