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Last Updated: Thursday, 16 March 2006, 15:13 GMT
New tax system favoured by panel
Guernsey could lose up to 80m if corporation tax is scrapped, according to an independent report.

The study was carried out by a panel consisting of a former States member, an economist and an independent economic consultancy group.

The report concluded the "zero-ten" tax model proposed by the Policy Council was the only viable option.

A "zero-ten" system means some companies would pay 0% tax, while others would be taxed at 10%.

Predicted deficit

The panel, which ruled out a "zero-twenty" alternative as "too risky", said retaining the finance industry in the island was vital.

The Isle of Man announced in its budget in February that it would introduce the "zero-ten" system.

It is one of Guernsey's main rivals in the finance industry and Jersey has also decided to adopt a similar arrangement.

The independent report has also estimated the States could suffer a loss of income between 50m and 80m, depending on what measures were introduced, and how islanders responded to them.

The island's government has been preparing for a predicted 48m budget deficit when corporation tax is abolished in 2008.




SEE ALSO:
Islanders in favour of sales tax
24 Feb 06 |  Guernsey
Politicians considering sales tax
22 Jan 06 |  Guernsey
States seeks advice on tax change
14 Jan 06 |  Guernsey
Minister warns of services cuts
29 Dec 05 |  Guernsey
Spending slashed in 2006 budget
25 Nov 05 |  Guernsey


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