Business group criticised for intervention on tax

One of Guernsey's biggest business representative groups has been criticised after sending a letter to new States members over plans to reform corporate tax.

The letter from the Guernsey International Business Association said moving to a to a territorial corporate income tax system, as proposed by Deputy Charles Parkinson, would lead to businesses leaving the island.

Parkinson said the letter was "misleading propaganda" and Deputy-Elect Dr Andy Sloan said it was "inappropriate and misguided".

The BBC has contacted the association for comment.

In the letter, the association said "territorial tax should not be seen as a viable solution to our fiscal challenges" and asked deputies to "consider alternative strategies that support sustainable economic growth without compromising the island's competitive position".

Currently finance businesses pay 10% tax on their profits, while other companies pay no corporate income tax.

Parkinson, the former treasury minister, was keen to see all companies based in Guernsey pay between 10%-15% corporate income tax.

In the last assembly he attempted to bring the policy in, but failed twice.

He has announced he is standing as President of Policy & Resources (P&R) with an intention to change the island's corporate tax structure if elected.

Sloan said "there are no proposals on the table to introduce a territorial tax regime at this moment in time".

He criticised the letter as "an intervention designed to undermine one declared candidate for P&R".

"It was a totally inappropriate action and misguided action one that has harmed the reputation of the association in my book," he said.

Former treasury lead for P&R Mark Helyar denied the intervention from the association was "propaganda" and said the assessment from Parkinson was "inappropriate".

"It is in my view accurate, justifiable and quite reserved," he said.

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