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A decision made (15/05/2006) regarding Goods and Services Tax - Financial Services Industry Consultation document.

Subject:	Goods and Services Tax – Financial Services Industry Consultation document
Decision Reference:	MD-TR-2006-0067	Exempt clause(s):		n/a
Type of Report: (oral or written)	Written	Person Giving Report (if oral):		n/a
Telephone or e-mail Meeting?	n/a	Report File ref:
Written Report – Title	JERSEY’S GOODS AND SERVICES TAX (GST) - Financial Services Industry Consultation document	Written report - author		Julian Morris – Fiscal Strategy Programme Manager
Decision(s): To agree to present to States Members on 19th May 2006, the Financial Services Industry (FSI), the business community and the general public a consultation document relating to an explanation of the proposed treatment of the Financial Services Industry under the proposed Goods and Services Tax.
Reason(s) for decision: To progress the implementation of a Goods and Services Tax according to the Crown Agents project timetable.
Action required: Approve the release on Friday 19th May 2006 of the attached Report and consultation document and inform the States Greffe accordingly.
Signature: (Minister/ Assistant Minister)			Date of Decision: 15th May 2006

Goods and Services Tax - Financial Services Industry Consultation document.

REPORT

JERSEY ’S GOODS AND SERVICES TAX (GST) – A Financial Services Industry Consultation document

Background

In 2008 Jersey will introduce a broad-based Goods and Services Tax (GST) at a rate of 3%, fixed for at least 3 years as part of the Fiscal Strategy (P44/2005).

On 28 March 2006 the Minister for Treasury and Resources published a consultation document on the draft GST Primary Law. The draft Law reflects the proposals in the Fiscal Strategy, amongst which was a proposal to raise between £5 and £10 million of the required £45 million GST yield from the financial services industry (FSI). This was to be achieved without either putting Jersey at a competitive disadvantage that would result in the loss of financial services business or create onerous administrative burdens.

The consultation document announced that a separate FSI consultation paper would be published and the draft has now been prepared.

The purpose of this Report is to provide States Members with the FSI consultation paper.

Financial Services Industry

The proposed GST treatment is intended to provide the required revenue yield without creating undue burdens on the sector or the Administration. At the same time it is intended to provide the sector with certainty of treatment and not bring about either the relocation of existing business to competing jurisdictions or lead to the loss of future business to those locations.

As the document is quite technical, it is prefaced by a ‘non-technical guide’ which outlines the proposed treatment. Although it is largely directed at States Members and the FSI, responses

are welcomed from any quarter.

This consultation will run beyond the period of the consultation on the draft GST Primary Law and conclude at the end on August 2006, at the same time as the consultation on the subsidiary GST legislation (Regulations), which will begin in early July. This third consultation document will similarly be widely available so that everyone with an interest will be able to make their views known.

A summary of responses to the draft Primary Law and Regulations and to the FSI paper will be published in the early autumn. The full GST Law will then be concluded and presented to the Assembly for debate towards the end of the year.

It is important that the entire process of GST implementation is open and transparent, with the maximum possible involvement of the Jersey public and business community. The attached document is intended to achieve that objective.

Comments and responses from States Members are most welcome.

Senator Terry Le Sueur

Minister for Treasury and Resources