Tuesday, January 25, 2005

Picardo says Government unable to achieve seamless transition

Dismantling of exempt tax regime

Gibraltar Government has not been able to achieve a seamless transition to a new finance centre corporate product, Opposition spokesman for Financial Services, Fabian Picardo declared yesterday.

Mr Picardo was reacting to the announcement by the European Commission of the measures it requires be put in place to dismantle the Gibraltar exempt company status which it has found to be contrary to the principles of State Aid.

What is obvious,” he said, “is that those local businesses who are dependant on this type of product will find it is not available to them at all by 30th June 2006.

Mr Picardo continued:

Although the Commission statement does not refer to any agreement having been concluded with the Gibraltar Government in respect of these measures, we note that the Government press release of Friday 21st January refers to these measures as having been under negotiation and agreed by the Gibraltar and UK Governments with the EU Commission throughout 2004. It will be recalled that these measures have become necessary as a result of the Commission’s decision not to accept the Gibraltar Government’s tax reform proposal after the latter had submitted the whole of the proposed new tax structure for the Commission’s approval.

The Opposition does not have the benefit even now of having had sight confidentially or otherwise of those tax reform proposals other than as already published by the Commission upon their rejection. We are therefore unable to express any view (favourable or negative) in respect of the detail of those proposals. We also have no access to the information provided by the Government to the Commission in respect of the current number of extant exempt company certificates.

The Opposition has sought information from the Government in the House of Assembly, on a whole range of questions that the Commission put to the UK Government regarding the economic implications of the exempt companies for Gibraltar, which the local Government has refused to provide. In those circumstances our comment in relation to the measures now agreed between the Gibraltar and UK Governments and the Commission must be based only on the information publicly available and our own consultation with professionals in the finance centre industry.

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