In an address to members of the island's Chamber of Commerce, Jersey Treasury Minister Phillip Ozouf reassured businesses that the jurisdiction's tax regime will remain unchanged over the next few years, as the government has now taken the steps necessary to establish sustainable finances.
Ozouf told attendees that the island had exceeded budgetary forecasts last year. The budgetary deficit of GBP12m (USD18.8m) was significantly lower than the forecast deficit of GBP72m, mainly due to strong corporate and personal income tax receipts. Furthermore, government departments were able to save more than was targeted under the Budget, and were permitted to carry forward balances into next year to aid them in meeting longer-term expenditure cuts.
"From a government perspective, we now have a more normalized mixture of funding sources from income tax, company tax, consumption tax and duties. This is much more sustainable for the future," he said. "Over the next three years we will be balancing our budgets and we will not be moving from our current system of taxation. Zero/ten will remain and Goods and Services Tax will stay at 5%. There will be no substantial changes. I am committed to low taxation, broadly-based and levied in a sustainable way. That is the Jersey system and will remain so," he affirmed.
"We have been through three very tough years and have made some difficult decisions on tax and spending. Jersey now has strong public finances and we are well placed to maximize the coming opportunities for growth. In the coming months we will be settling the budgets for departments, releasing and debating our first Medium-Term Financial Plan."
"Despite uncertain global economic conditions, we have the capacity to invest in projects that support economic growth. Our new Economic Growth and Diversity Strategy makes it clear that we are committed to supporting existing businesses, like those of Chamber members."
Concluding, Ozouf noted that the government has in fact been left in an enviable position to be able to allocate GBP10m towards a new Innovation Fund. This fund, Ozouf explained, will support new and existing businesses engaged in innovative activity. This will be overseen by Jersey Business, a newly-established organization, headed by the Economic Development Minister, Alan Maclean.
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Ozouf told attendees that the island had exceeded budgetary forecasts last year. The budgetary deficit of GBP12m (USD18.8m) was significantly lower than the forecast deficit of GBP72m, mainly due to strong corporate and personal income tax receipts. Furthermore, government departments were able to save more than was targeted under the Budget, and were permitted to carry forward balances into next year to aid them in meeting longer-term expenditure cuts.
"From a government perspective, we now have a more normalized mixture of funding sources from income tax, company tax, consumption tax and duties. This is much more sustainable for the future," he said. "Over the next three years we will be balancing our budgets and we will not be moving from our current system of taxation. Zero/ten will remain and Goods and Services Tax will stay at 5%. There will be no substantial changes. I am committed to low taxation, broadly-based and levied in a sustainable way. That is the Jersey system and will remain so," he affirmed.
"We have been through three very tough years and have made some difficult decisions on tax and spending. Jersey now has strong public finances and we are well placed to maximize the coming opportunities for growth. In the coming months we will be settling the budgets for departments, releasing and debating our first Medium-Term Financial Plan."
"Despite uncertain global economic conditions, we have the capacity to invest in projects that support economic growth. Our new Economic Growth and Diversity Strategy makes it clear that we are committed to supporting existing businesses, like those of Chamber members."
Concluding, Ozouf noted that the government has in fact been left in an enviable position to be able to allocate GBP10m towards a new Innovation Fund. This fund, Ozouf explained, will support new and existing businesses engaged in innovative activity. This will be overseen by Jersey Business, a newly-established organization, headed by the Economic Development Minister, Alan Maclean.
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Disclaimer: Nothing I say should be taken as tax, legal or financial advice. Anything I say is for general informational purposes only. Always seek independent professional advice.