Categories for GIBA Media Statements
Finance Industry body confirms support of funding for promotional agency
21 November 2023
The Guernsey International Business Association (GIBA) has confirmed its support for an increase in members’ funding of Guernsey Finance for 2024. This is the portion of funding that is paid by finance sector companies to cover the costs of Guernsey Finance, which is a joint industry and government initiative.
The agency is jointly funded by industry and the States of Guernsey, with government funding included as a priority in the latest iteration of the Government Work Plan.
Guernsey Finance’s role is to promote Guernsey as an international centre of excellence for financial services through marketing, communications and business development, with representatives active in the island’s chosen markets around the world.
The agency is tasked with helping to promote the island’s finance sector in an extremely crowded marketplace against very well-resourced competitors.
In the last year, Guernsey has been named International Finance Centre of the Year at the Citywealth IFC Awards 2023 and risen 12 places in the latest Global Financial Centres Index. Guernsey also won European Domicile of the Year at the European Captive Review of the Year awards.
The work of Guernsey Finance also helps to ensure that influential bodies such as CityUK, the BVCA and the City of London Corporation understand the role that Guernsey plays in the flow of capital around the world and its value to the UK business community.
Deputy Nick Moakes, Chair of the Guernsey Finance Sector Forum and member of the Committee for Economic Development said: “I welcome this announcement. Guernsey Finance is responsible for promoting Guernsey’s finance sector on the international stage.
“Whilst Guernsey is already a leading international finance centre, it is incredibly important that we continue to promote Guernsey in what is a highly competitive marketplace. This additional funding will help Guernsey Finance to deepen and broaden its international engagement.”
Paul Sykes, Chair of GIBA said: “Our members have supported an increase in what companies will pay towards Guernsey Finance. We believe that the continuation of government funding for Guernsey Finance at the current level at minimum, must be part of the island’s economic development strategy.
“It is wholly appropriate that our industry supports the work of Guernsey Finance and vitally important for government to invest in the development in the sector which makes a significant contribution to the island’s GDP.”
The Guernsey International Business Association welcomes improved air connectivity
26 October 2023
Paul Sykes, Chair, The Guernsey International Business Association (GIBA) said:
“The Guernsey International Business Association (GIBA) believes that Aurigny’s new destinations will be welcomed by the finance community, particularly the London City and Paris routes. London City offers easy access to colleagues, clients and key intermediaries; the City remains an important financial district for Guernsey and this kind of connectivity helps to position the island as an accessible international finance centre. The Paris route will improve connections to Europe, and as an international hub, it offers business travellers more choice and improves the jurisdiction’s appeal to clients around the world.
“We hope the routes will be popular with islanders and can be maintained for the long term economic and social benefit of Guernsey.”
Guernsey International Business Association Responds to the Tax Review
17 October 2023
The Guernsey International Business Association (GIBA) has provided input into the States of Guernsey’s (SoG) development of the Tax Review in the interests of resolving the real and pending structural deficit dilemma.
GIBA implores the States of Guernsey’s Deputies to act at the earliest opportunity to avoid further delays that will have adverse commercial, economic and social consequences for the Island. The absence of investment in infrastructure, health and education alone will have severe direct and indirect consequences on the lives and prospects of the people of Guernsey with long term ramifications.
Standard & Poor (S&P) Global has warned of further ‘negative rating action… if the government fails to implement tax reforms that stabilise its funding needs.’ A further downgrade will make Guernsey less attractive to business and increase costs, exacerbating the deficit.
Whilst it is being suggested that capital investment could be withheld or pension funding deferred this will add to costs in the future necessitating more radical revenue raising later i.e. even bigger tax increases.
The island’s finance industry generates almost 40% of its GDP and provides employment for around 7,000 islanders. The finance sector has grown on the basis of tax, regulatory stability and certainty so GIBA supports measures which seek to redress the deficit with a clear and timely plan on the implementation of tax reforms.
Business is expected to make a significant contribution to revenues under the Policy & Resources Committee’s Funding & Investment Plans. However, mechanisms for achieving this do not and should not include changes to the existing corporate tax regime. Guernsey is aligned with Jersey and the Isle of Man with a collective approach to corporate tax OECD’s Pillar Two Framework. Remaining in lockstep with the other Crown Dependencies is critical. International accountancy firm, Ernst & Young (EY) considered the introduction of a new corporate income tax on a territorial basis when other competitor jurisdictions maintain their existing regimes and concluded that to do so will lead to a reduction in new business and could also cause existing businesses to relocate.
E&Y also warned that any move to a territorial system can be expected to trigger a reassessment by international standard setters in relation to corporate taxation, including the EU’s Code of Conduct Group and the OECD Global Forum. This would import further uncertainty and damage to Guernsey’s economy by making the island less attractive to do business in, negatively impacting growth in the island’s key revenue-generating industry.
In short, the unilateral adoption by Guernsey of a territorial tax regime brings significant risk without substantive reward.
Other measures that are envisaged in P&R’s proposals, such as ISE exemption fees, the introduction of a flat fee corporate levy, and OECD Pillar II compliance are a more effective and simple way to generate additional revenue from corporates without making any changes to the existing corporate tax regime. That said, more clarity and detail is required in these areas and proper consultation with industry, based on a thorough impact analysis, should take place prior to implementation of any of these potential measures.
GIBA accepts the need for revenues to be raised by widening the basis of our tax system with a mitigated consumption tax and increased business contributions to SoG’s revenues. However, it is also essential for government to achieve savings from spending cuts. GIBA notes the Chamber of Commerce has highlighted Public Sector Pension Reform as one of the single biggest cost savings that could be achieved. Compensating measures would be required to insulate nurses, teachers and other essential workers but defined benefit/final salary schemes have been closed and confined to history across the private sector across the world because they are unsustainable.
We recognise that these are challenging issues for Deputies to consider. However, the policy letter does contain a combination of elements that offer a sound basis on which to move forward. The proposals also attempt to rebalance the island’s sources of tax revenue in line with other jurisdictions, such as Jersey.
We welcome the opportunity to engage directly with Deputies who wish to understand more about the potential impact of the different tax options being proposed in the policy letter and in the various amendments over the coming week.
Statement from Guernsey International Business Association on the Government Workplan
16th October 2023
Paul Sykes, Chair of the Guernsey International Business Association (GIBA) says:
‘Ahead of the States debate of the Government Workplan, GIBA recognises that skills, participation in work and fostering entrepreneurial growth and innovation are all important factors in ensuring Guernsey is an attractive place to do business and in the island’s economic and social prosperity.
Affordable housing remains a critical issue for the finance sector. The costs and availability of housing play a significant role in recruiting and retaining staff; the ability to attract and retain staff with the right skills is a crucial factor in the island’s competitiveness and the health of Guernsey’s economy.
To ensure Guernsey’s future prosperity we must prioritise investment and growth. The continuation of government funding for Guernsey Finance must be part of the island’s economic development strategy.
The finance sector remains the island’s biggest single driver of GDP, and Guernsey has a lot to offer as a jurisdiction, but it is competing in an extremely crowded marketplace against very well-resourced competitors.
Decisiveness and a clear strategic direction are essential to give businesses the foundations and confidence needed to invest in the island’s future. We look forward to a positive conclusion from this week’s debate.’
GIBA Statement on Electricity Strategy Debate
GIBA understands the urgency for the States of Guernsey to act decisively in the matter of the island’s electricity strategy, which is critical to the long-term economic wellbeing of Guernsey, including the financial services industry, the backbone of our economy. GIBA understands that Deputies should also be mindful of affordability, security and evolving trends in sustainable and responsible energy measures and will seek to factor these in proportionately to their decision-making in order to retain Guernsey’s credibility on a wider global stage.