‘Firms losing faith in States over unpredictable taxation’
BUSINESSES are losing confidence in Jersey’s government due to its unpredictable taxation policies, which could scare investors away from the Island, a leading retailer has claimed.
During last November’s Budget debate the States voted in favour of introducing a new 20 per cent tax on large retailers and to increase the rates of Vehicles Emission Duty, a one-off tax on cars when they are imported to the Island depending on their level of CO2 emissions.
Both measures have provoked a backlash from business, with large supermarkets claiming that the retail tax could force food prices up and eat into funds which are needed for investment in infrastructure and staff training.
Meanwhile, car dealers have complained that the changes to VED, which came into effect at the start of the year, have resulted in charges increasing in some cases by as much as 177 per cent.
Retailer Gerald Voisin, who owns Jersey’s second largest department store Voisins, said he was concerned at the manner in which taxes which have a significant impact on businesses are being introduced.
‘The retail tax was first suggested at the end of 2016 and there was no consultation. The Vehicles Emissions Duty was suggested in an amendment two weeks before the Budget. There was no consultation – it was introduced very quickly. It is very, very poor,’ he said.
‘It was the behaviour you would expect from a tinpot dictatorship rather than a legislature which is responsible for an international financial services centre.’
Mr Voisin said that the introduction of such measures at short notice was unsettling for businesses.
‘It has created a loss of confidence among businesses because we don’t know what to expect next,’ he said.
‘You need to have an idea of what is going to happen next because businesses need to plan. Sometimes it ends up being better just to do nothing if you don’t know what is going to happen.
‘At the moment, people are thinking which industry is going to move to the 20 per cent rate next? Hospitality? So, maybe the big hotels. Or it could be construction?
‘The only policy appears to be to keep the number of businesses low so that the zero-ten tax regime can remain in place.
‘All this uncertainty is going to prevent businesses from wanting to move here.’
He added that Jersey was also becoming less attractive for firms as other jurisdictions lower their corporation tax regimes, such as in the UK, where the rate is being reduced to 17.5 per cent.
David Seymour, managing director of Seymour Hotels, said he believed the Island’s government should ‘get itself in order’ before asking businesses for more money.
‘They should make what changes they need to to reduce costs for themselves and if there’s still a shortfall after that, then they they can sit down and talk to businesses,’ he said.