Will Jersey put taxes up?
Jersey has long been seen as a low tax jurisdiction. However, it seems that no country is exempt from the belt tightening that is becoming necessary in financial centres all over the world. The question is; what effect (if any) will that have on offshore investors in Jersey?
The Crown Dependency benefits from the military protection of the United Kingdom but the freedom to do its own thing politically and economically. It is famously difficult to move there, creating an exclusive, wealthy financial centre that is based around the wealth creation industry.
Jersey’s Council of Ministers want to save 10% of their budget over the next 3 years, and are looking at ways of achieving this ambitious target. The island’s Treasury Minister stressed that efficiency savings and reductions in public spending would be their first port of call. Senator Philip Ozouf stressed that he was keen to ensure that taxpayers were getting value for money. However, if these efficiency savings do not yield enough of a reduction in the deficit, it seems that tax rises may be on the horizon.
Jersey Ministers are going to launch a review that will consider whether to raise Jersey taxes. It is not clear whether the measures would affect non-residents.
On the other side of the world, there is good news for individuals in Australia as more tax cuts are introduced. The latest round of measures is set to benefit low and middle income families, and is part of a programme of tax reforms that is now in its fourth year. Australian Treasurer Wayne Swan has announced an increase in personal allowances, resulting in a virtual tax exemption for many low earners. This is coupled with a simplification of the way in which tax returns are filled in and computed.
However, there is real controversy around the proposed mining tax, which opposition leaders claim would threaten an industry on which thousands of Australians rely for their livelihoods. With an Australian election looming in the next few months, no doubt the issue will be hotly debated.