Tax has dominated the news agenda for some time now driven by
cash strapped governments need to squeeze every last pound, dollar
or euro out of the system. But there is something beyond tax, more
important, and fundamental to the freedom and prosperity of
nations, and that is trade
Trade creates economic activity between
individuals, companies and countries. It creates value as
one party manufactures a good or provides a service, that activity
in turn generates supporting activity; parts supply, or
ancillary services to facilitate the primary, such as
transport, shipping, marketing and promotion. Public services are
funded out of tax, but tax is funded out of trade and the wealth
and employment creation that goes with it. Without business and
trade there is no tax.
The remarkable transformation of India, China and Brazil over
the last 30 years has proven beyond any doubt that trade not aid
brings lasting and sustainable prosperity. It is surprising
then that an economic study of Jersey's trade links has never
been attempted until the newly released Capital Economics study
launched in London last week.
What is also remarkable is how this small economy located in the
Channel Islands benefits the United Kingdom to such a significant
degree as illustrated by the chart below:-
The chart demonstrates that Jersey generates a significant
trade surplus by exporting high-end added value financial services
to the tune of a net £0.6bn per annum. It is this trade
surplus that supports 12,500 jobs and 50% of Jersey's tax
revenues, giving rise to some of the highest quality public
services in Western Europe, with still around one third of Island
residents on more modest incomes paying no tax at all.
But that is the benefit to Jersey of a trading account in
surplus, but what about the UK? An examination of the next slide
will surprise many, Jersey is in deficit with the UK on trade,
which means the UK benefits from £400m per annum of net
trade and 11,000 jobs outside of financial services.
Not only is Jersey an overwhelming benefit to the
UK through its placement of international capital but it is a
net importer of significant volumes of physical goods from the
UK giving rise to a trade surplus in the UK's favour.
Jersey raises revenue from providing services to the mainly
non EU world, but most of its spending is benefitting the
Tightened monetary policies leading to limited capital inflow to the securities market, its low liquidity and significant decrease in stock price partly contribute to the low attractiveness of Vietnam's stock exchange.
Unbelievably, the calendar has somehow advanced to September, the month in which we celebrate National Day. For families, it also marks the end of the summer holiday season and the start of the new academic year.
This Q&A gives an overview of key recent developments affecting doing business in Turks and Caicos Islands as well as an introduction to the legal system; foreign investment, including restrictions, currency regulations and incentives; and business vehicles and their relevant restrictions and liabilities.
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