Comment: "Let's make zero/ten a reality"

Monday 16 October 2017

How to balance the books? The Island's 'Chancellor' Senator Alan Maclean thinks one of the best ways is to make local retailers pay tax. But is it a good idea? Here, well-known businessman, Kevin Keen, gives his personal view on proposals being made in next year's budget.

"Over the last few weeks, our Chancellor Senator Maclean has published his budget for 2018.

"One key element is the introduction of a tax on the 20 largest retailers operating in Jersey, which is expected to raise £5.7 million out of projected States income of almost £800 million in 2019. I for one don’t agree with it, but not for the same reasons a number of the retailers are stating. We have been waiting for the States of Jersey to do something about the unfairness of zero/ ten pretty much since we started talking about it in 2004; and after 13 years, this is the best the Treasury Minister can come up with - pretty poor from my point of view.

"Of course retailers are an easy mark for politicians; as an island, many of us like shopping but we generally don’t like local shop-keepers.  This is not the first time the States has expressed their lack of support - indeed they are even happy to give an attractive tax break to online retailers from outside of Jersey. Amazon must be one of the top 20, but of course they are not included, they don’t even have to charge their Jersey customers GST.

That's grossly unfair to local businesses, but many politicians just don’t care, there's no votes in sorting that one out.

"At the risk of upsetting all readers of Bailiwick Express I think the GST de minimis should be £100 not £240.  After all it is zero in the UK, as we know, to the cost of many jobs in fulfillment. I also think that any company that uses island resources funded from tax revenues should pay some income tax: most companies in the finance industry do, utilities do, now it is time for all the others, not just a few retailers. Let’s make zero/ ten a reality. Zero if you are incorporated in the island but don’t trade here, 10% for those that do. After 13 years or so of faffing about, let's get on with it.

"Again, its an unpopular view, no doubt - but I think a tax system where most of tax comes from employment and consumption, has a big risk for the future as automation takes away jobs. That's another reason for a proper review, and not one that kicks the whole thing into the long grass for another decade or so.

"There is not much mentioned about how the cost reduction plans are going in the Budget. In 2018, the States projected expenditure, net of user pays charges etc, is  almost £780 million; in 2013 it was £688 million on the same basis. I have not seen much evidence that the public sector is being reformed, as has been promised on numerous occasions.

To be fair to politicians, there is huge difficulty in achieving reform, with no 'burning bridge' forcing them to make difficult decisions.

We also have an election around the corner, when politicians want to be seen doing popular things - like being mean to those nasty local shop-keepers!"

The views expressed in this article are those of Mr Keen personally, and not of any company he is linked to.