Guernsey politicians propose introducing 15% Corporation Tax as alternative to GST
Kate Prout reports...
A group of Guernsey politicians has proposed introducing a 15% Corporation Tax on local businesses as an alternative to bringing in GST.
Deputy Charles Parkinson, who is part of the anti-GST group, has criticised the introduction of a Goods and Services Tax before overhauling the existing zero-10 tax regime.
Currently, Guernsey companies only pay tax on Guernsey-sourced income. Some of these companies pay 0% tax and some pay 10%.
If the amendment to the Guernsey tax review is successful, all Guernsey-registered companies would pay a 15% tax on their profits - reducing the island's deficit without increasing individual taxes.
Deputy Parkinson says: "The protection for the corporate world is that they only pay tax on Guernsey-sourced income, so if you're an offshore business it's very unlikely you'll have any Guernsey-sourced income.
"But if you have a property in Guernsey you're likely to have to pay tax on the rent. That was always the case but, in general, if you're a company and you receive income from outside Guernsey, that won't be taxable."
A Guernsey-based garage owner, whose business is zero-rated, agrees with the Corporation Tax proposals. Paul Le Breton says: "I think it's by far the safest and fairest form of taxation.
"If I'm producing profit, I think we should pay tax on that profit and I'd like to think we have a moral obligation and other companies should be of the same mind."
However, the amendment is not popular amongst all islanders. Guernsey's Chamber of Commerce is against taxing big business.
Steve Rouxel from the Chamber of Commerce says: "the Corporation Tax being brought in, being tabled by the anti-GST group are - and I use these words carefully - dangerous and shouldn't be considered.
"Businesses already contribute a large amount of money. The proposals being looked at are too far ahead of their time and shouldn't be looked at. I'd say we should be very much against the proposal."
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