Senator Alan Maclean stressed that such a move would hinge on careful analysis of what such a tax would mean for Jersey, but said that Guernsey was looking at it and it could also be an option here.
The Isle of Man introduced the tax in 2013 in an effort to create revenue from large firms whose shareholders were based outside the island and so would be paying tax in their own jurisdictions, not in the Isle of Man.
To get round that, the ‘Tesco tax’ – which gained its name because Tesco was one of the largest companies in the island at the time – was introduced so that large companies would pay tax based on the amount of space the company takes up.
Senator Maclean, who was speaking at a Change.je public debate in St Brelade last night, revealed the idea after being challenged over whether the Island’s controversial zero-ten tax policy was still fair and equitable.
That policy, which was introduce in 2009, involves foreign non-finance firms paying no tax and finance firms paying a reduced rate.
It has been criticised by Richard Murphy, a long-time critic of Jersey who founded the Tax Justice Network, who claims it is to blame for the Island’s £145 million financial deficit.
The Treasury Minister said he believed that zero-ten saved the finance industry and had helped to retain the 13,000 jobs linked to it at the time.
On the Tesco tax, which would not be restricted solely to retail, Senator Maclean said: ‘In the Isle of Man they have introduced the Tesco tax, which Guernsey are looking at, in which there are problems when shareholder profits go off-island.
‘Although the state can retain the tax profit from the employees of those companies, the shareholders are based off-island and therefore pay tax in their own jurisdiction.
‘That is an issue in the Isle of Man so they introduced the Tesco tax and set it on the size of the space the business occupies and they tax accordingly.’
In the Isle of Man the Tesco tax is a ten per cent corporate rate introduced for major retailers with annual profits of more than £500,000.
Senator Maclean added: ‘For us to consider a tax of that nature, we need the data to ensure that we remain compliant with the EU. We do not have that data, but the intention is to collate it so we can consider it as an option.’
Other panellists, who included former Assistant Treasury Minister Tracey Vallois, who resigned from her ministerial post last week, spoke about zero-ten.
The Deputy, who sat next to Senator Maclean and clashed with him on several topics, said that zero-ten should be scrapped, saying that it was not ‘fair and equitable’.
However she said there was not the political will do so.
Former Senator Sarah Ferguson said that zero-ten had been a good idea at the time but that now it was time to move on.
The event was chaired by Ben Quérée, of the Bailiwick Express, and the other panellists were estate agent Roger Trower, property lawyer Paul Scally and Transport Minister Eddie Noel.
THE introduction of the zero-ten tax regime was one of the most significant changes in Jersey this century.
According to its proponents, it saved the finance industry and ensured the goose which lays the golden egg did not fly its Island nest.
But, of course, a system which levies tax at ten per cent on finance companies and 20 per cent on utilities, but enables all other companies to pay no corporate tax at all, has not been without its losers.
The term black hole entered the Jersey lexicon, followed by GST and 20 means 20.
Middle Jersey has been left battered and bruised.
Last night, Treasury Minister Alan Maclean said he was looking at a ‘Tesco tax’ to generate revenue from companies currently paying nothing.
The idea was mooted by his predecessor, but without any new measures being introduced.
Taxing local businesses is not without its problems.
Senator Maclean says a new levy must be fair, just and in Jersey’s best interests.
Correct, but let’s just hope that ordinary taxpayers are factored into that equation this time.
