Deputy Susie Pinel was questioned on the issue in the States Assembly yesterday, with some Members calling for a review and a potential increase in tax contributions from some of the Island’s richest incomers in light of the current financial situation caused by the Covid-19 pandemic.
Currently those with so-called 2(1)(e) high-value-residency status pay a minimum contribution of £145,000 annually, and then 1% in tax above that.
Deputy Pinel said the current tax regime for high-value residents had come into force in 2018, and the next review was due to take place in 2023.
She explained that in the intervening period, there would be no increase in tax contributions above RPI, and said she did not believe an earlier review was necessary.
Also during the sitting, Deputy Kirsten Morel asked whether the tax contributions should be increased following reports that more high-value people were looking to move to small and safe islands.
He asked: ‘Does the minister agree that as
one fundamental with tenants economies is supply and demand, and with reports that high-value individuals and families are looking for small safe islands to live in, it is time the Island responds to this increase in demand and raises the price of high-value residents coming to Jersey?
‘As the previous review took place before Covid-19, it is out of date, as there is a change in the global economy.’
Deputy Pinel responded that she did not feel there was a need for a review, adding that high-value residents contributed to the Island in more ways than just tax.
She added: ‘The last review told us Jersey’s regime was internationally competitive, and individuals give more than just annual tax contributions.
‘There are things like stamp duty, and many contributors give to charities and provide local employment and services.
‘The review takes place every five years. The world has changed in the last six or seven months but we can’t review [the regime] every time there is a change in the global economy.’
When asked whether she felt the 1% rate should be changed, the minister added: ‘The 1% rate was introduced and it is impossible to change by law retrospectively.
‘I agree that to keep with the lower rate of 1% is
not the way forward but at the moment one can’t, by law, change it retrospectively.’
