27 September 2005
MEDIA RELEASE
The international development company, Crown Agents, has been awarded a contract by the States to assist with the introduction of a goods and services tax (GST) for Jersey, planned for 2008.
The contract covers all aspects of the design, preparation and implementation of the new tax system - including the law, policy issues, project management, business support systems, training, compliance, taxpayer services and education and communications and publicity.
Last year the company successfully completed a previous contract to investigate the feasibility of a GST for the Island and to design a prototype tax that, along with other measures, would meet £40-45 million of an anticipated revenue shortfall resulting from a reduction in the Island’s corporation tax rates.
Following a comprehensive public consultation, Crown Agents produced a detailed report, outlining the issues to be addressed, together with recommendations for implementation. Its findings were accepted in full by the Finance and Economics Committee and, in May this year, the States approved the introduction during 2008 of a GST, as part of the Fiscal Strategy.
This second contract has been awarded following a competitive tender exercise and an evaluation of the Crown Agents’ contract bid.
Senator Terry Le Sueur, President of the Finance and Economics Committee, said today: “In its initial report Crown Agents concluded that a broad-based tax with a single rate of only three per cent and with a threshold of £300,000 would meet Jersey’s revenue requirements. This means that Jersey has the opportunity to introduce a GST with one of the lowest tax rates and highest thresholds in the world.
“However, I should stress that nothing is ‘set in concrete’. Over the next two years there will be widespread consultation on all aspects of the new tax. It is our intention that the whole process should be transparent. We want to ensure that the public and business community are properly informed and actively involved in the process. It is important, therefore, that there should be no prejudgement of any of the issues before there has been further comprehensive evaluation of the issues and detailed proposals have been developed. I am happy to give an assurance that there will be ample opportunity for comment during the whole process.
“Only when all the economic, administrative and social implications of a Jersey GST have been evaluated and the views of all stakeholders have been taken into account will the States be in a position to make a final decision on the scope of the proposed GST and approve the enabling legislation.”
Steve Lowthorpe, Crown Agents Director Taxation, commented: “We are delighted to have the opportunity to assist the States with the introduction of this important new tax.
“As a result of our previous work in Jersey and our wide experience of delivering state tax reform projects in other parts of the world, we believe we have a good understanding of the actions necessary for a successful introduction of a GST for the Island and we are sensitive to the social and economic issues surrounding its implementation and development in the Island.
“Importantly, our Company is entirely independent and has no links with any business sector. This enables us to be, and to be seen to be, entirely impartial. We believe this ‘neutrality’ can provide a significant source of assurance to the Jersey taxpayer and voter during the implementation of a GST.
“It is our intention to involve all stakeholder groups in the process and to develop their understanding and trust. We fully support the Finance and Economics Committee’s wish to ensure that all stakeholders are properly informed about issues and developments in a timely fashion and that they are made to feel included in the decision-making process.
“To this end we will develop comprehensive information channels. We will aim also to achieve maximum personal contact with the business community and other stakeholder groups to secure their valuable inputs to the process and to achieve both consensus and the best possible solution for the Island.”
ENDS
For more information, contact F&E President Senator Terry Le Sueur, telephone 863994, or Crown Agents Tax Director Steve Lowthorpe, telephone 0208 710 6063.
NOTE TO EDITORS:
Crown Agents provides international development services, particularly in the fields of revenue enhancement, public finance, banking and procurement. It is currently working for the public and private sectors in more than 100 countries as well as for international development agencies and institutions around the world and has successfully delivered a number of major state tax reform programmes.
Originally established in 1833 as a public sector body for the procurement of goods and services for the British Crown Colonies, Crown Agents today operates as a private company, limited by guarantee. It is owned by the Crown Agents Foundation, membership of which includes international development organisations, charities and academic institutions.
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