Concerns raised about economic impact of proposed taxation
8th February 2022
The Corporate Services Scrutiny Panel has issued a comments paper in response to the Minister for Treasury and Resources' proposal to introduce a tax equivalent to stamp duty on the transfer of enveloped property.
A key element of the Panel's review was to examine the economic impact of the Enveloped Property Transactions Tax. Key stakeholders have raised concerns that the economic impact analysis does not provide a sufficient basis for an informed decision on the economic consequences of the taxation. The Panel is of the view that the release of this report in late January has restricted the Minister's ability to address these concerns.
The Panel has lodged an amendment following concerns raised that the tax would create uncertainty and complexity around the transfer of shares and risk prejudicing international investors against Jersey companies. If approved, the amendment will remove the requirement of companies to provide a receipt as evidence of having paid the tax before transferring shares, to reduce the administrative and legal burden.
Vice Chair of the Corporate Services Scrutiny Panel, Deputy Steve Ahier, said "Whilst this new tax is a complex and controversial piece of legislation, it seeks to ensure the broadly equal treatment of similar types of land transactions in Jersey. We recognise, however, stakeholders' valid concerns about the economic impact and the reputation of Jersey's economy internationally, which should have been consolidated in further depth prior to the debate. We hope that the Assembly will accept our amendment to ensure that, if adopted, the proposed taxation will stay in keeping with the Government's principle of keeping tax broad, simple and fair."
The Minister's proposed tax and subsequent amendments will be debated by the States Assembly during this week's States Meeting, which begins at 9:30am on Tuesday.
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