Difficult times for zero-ten tax

Guernsey's "zero-ten" tax system may have to be revised in the light of the economic downturn, said Treasury and Resources Minister Charles Parkinson.

The States hoped the policy, introduced in January, would attract more businesses to the island.

But Deputy Parkinson said the system to charge some companies 0% tax and others 10% tax was based on economic growth, which left it in "difficulty" now.

He said the island could face a budget deficit in the next couple of years.

Deputy Parkinson said: "Unfortunately zero-ten has come in at the onset of a sharp downturn.

"A policy based on growth in this climate is obviously a policy that's in difficulty.

"We can see a considerable structural deficit emerging in 2010 and beyond, probably in the region of �30m or �40m a year."

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