GSD URGES LEVEL PLAYING FIELD FOR TAX AND IRKS GOVT
There must be a level playing field when it comes to taxation so that Gibraltar will suffer the burdens of compliance but not the benefits of having a compliant tax system, said the GSD Opposition this week.
“That would simply place Gibraltar at a significant disadvantage and would be unacceptable,” said a statement from the party who vows to work with and support the Government in order to prevent unfair discrimination against Gibraltar companies.
“This is an important issue for the Finance Centre and one that we believe should be above party politics,” said the Leader of the Opposition, Daniel Feetham in the statement.
The GSD’s statement follows the news that the OECD has rated Gibraltar as ‘Largely Compliant’ in relation to the exchange of tax information in practice, news the party welcomes.
One area of potential tax discrimination arises because Gibraltar does not have Double Taxation Agreements. “This is because some countries make provision in their domestic tax legislation that if they do not have a Double Taxation Agreement with another jurisdiction (notwithstanding that they might have a tax information exchange agreement) entities in those jurisdictions are penalised and discriminated against for tax purposes,” said the GSD statement.
“This can be a potential disincentive for institutional investors using Gibraltar when they come to select a domicile compared to say Malta which does have double taxation agreements,” the statement continued.
On the OECD rating the Opposition said that the Government are continuing with their policy in this area, but duly noted that this is also to do with an international agenda on the part of the OECD and EU. Under this Gibraltar, like other finance centres are giving up tax confidentiality in defined circumstances.
“It is equally imperative that those countries that have benefited from Gibraltar doing so do not continue to unfairly discriminate, under their own tax systems, against Gibraltar companies trading with entities or persons within their territories,” said the Opposition.
Gibraltar was transferred to the so called ‘White List’ in October 2009 after the then GSD Government signed 13 Tax Information Exchange Agreements.
“By the time that the GSD left office in 2011 the Gibraltar Government had signed over 20 such agreements with leading jurisdictions,” said the GSD.
GOVERNMENT RESPONSE
The Government said the GSD statement contained insults and ill-thought criticism, which the Opposition may be doing to “deflect from their own inability to be constructive and put Gibraltar first.”
It also said that the Opposition did not comment whatsoever on the OECD agreement on the exchange of information or on the “excellent” report by the peer review group on Gibraltar’s progress in this area.
The fact the Opposition did not do this prompted the Government to call this “incredible” and say that as a result it confirms that Government Minister Albert Isola was right when he said “the sole interest of the Opposition is to comment on matters that they believe to be of political benefit to them and not what is best for Gibraltar.”
The Government believe that the Opposition’s silence on the OECD report means the party are all about doing what is best for them and not for Gibraltar. According to the Government, the “entire business community” will know this.
In summarising their thoughts on the Opposition’s statement they said it “is yet another example of their negative scatter gun approach to politics which does such a disservice to our Community and which more and more people are disengaging from.”
