17 July 2007
David Kern, the Economic Adviser to the British Chamber of Commerce has confirmed that a goods and services tax (GST) is the right option for Jersey.
In a report commissioned by Jersey’s Chamber of Commerce, Mr Kern says that introducing GST and reducing corporate tax are the correct strategic responses if Jersey is to safeguard its key industry - financial services. He stressed the importance of continuing to support the finance sector since this will in future continue to be Jersey’s main wealth creator.
Mr Kern is in the Island today speaking to the Chamber of Commerce about the prospects, opportunities and threats facing Jersey’s economy.
The former Chief Economist to NatWest maintains the focus on GST as the main tax aimed at closing the fiscal hole created by the 0/10 framework is correct since there are good economic arguments for taxing consumption, rather than income or profits. The States of Jersey will introduce GST in Jersey next spring at a rate of 3%. It is estimated this will bring in £45 million to fund public services.
Mr Kern praises Jersey’s politicians and civil servants, crediting them with creating the background to the Island’s economic success.
The Minister for Treasury and Resources, Senator Terry Le Sueur says “We welcome David Kern’s assessment and any constructive debate about the future of Jersey’s economy. Mr Kern stressed the importance of growth combined with a medium-term fiscal framework. I completely agree with him and welcome his support for Jersey’s strategy, enshrined in our growth plans, 0/10, GST and 20 means 20, together with the Fiscal Framework agreed by the States last December. We hope to have further discussions with Mr Kern about the recommendations he makes in his report.”
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