Tuesday, 24 February 2015
Has Singapore blinked first?
Today Singapore has increased its top rate of income tax from 20 to 22 percent for highest earners. 1 It is the first increase in the top rate in many decades. Importantly Singapore is often seen as the far east competitor to Jersey for finance business, and it has been suggested we have lost some business to them in recent years. Like us Singapore is an island state, though it has long since given up on farming and greenery and opted for high rise high density living. Many fear it is the model for our future if some have their way.
The move can hardly be surprising - they are subject to similar global influences on their government finances as we are. In being the first to raise the top rate they have undermined the 'we must compete' argument touted in the other offshore centres whom also have currently a 20 percent top rate. Given the parlous position of the States of Jersey finances the temptation must be significant.
The real question though is who between the Crown dependencies will blink first on the issue of 0/10 . That's the basis of the really big loss of income to our government in recent years. The current situation cannot persist