THE Island should not accept as ‘blind faith’ the move to a zero rate of corporation tax.

According to Senator Stuart Syvret, there should be a full debate on whether it is the right move before the Island considers a sales tax and other measures to fill the £100 million hole in tax revenues that it would cause.’There has been no chance for an informed debate that considers the alternatives, the different scenarios, the possible ways forward,’ said Senator Syvret.

‘All we have had is P & R and Finance telling us it is the only option.

There has been no States debate and no proper public debate on whether they are right.’The EU and the UK have forced Jersey and other offshore centres like Guernsey and the Isle of Man to take action on what they consider to be ‘harmful’ tax practices.

It means that from 2009, the Island will have to scrap various types of company which enable foreign firms to avoid the full rate of tax.P & R have announced that the Island will introduce a zero rate of corporation tax for companies, foreign and local, although a special rate of 10% could be levied for financial institutions.The resultant loss in tax has been estimated at up to £100m, which is why alternatives such as a sales tax are currently under consideration.

Senator Syvret argues that the move to a zero rate has been presented as a fait accompli.

Finance president Senator Terry Le Sueur, however, says there simply is no realistic alternative.

‘We either do this or we lose the finance industry.

That’s the alternative,’ he said.