New tax on Jersey's largest companies could raise £67m for the island's hospital
A new tax hike on Jersey's largest multinational companies could see £67m spent on financing the island's hospital over a three year period.
The Pillar Two tax scheme would apply a 15% minimum tax rate for companies with global annual profits of more than £640m.
Jersey's government has published its legislation which estimates the tax will raise £52m annually.
Guernsey has previously estimated they could raise more than £30m a year using the same system.
Around 130 jurisdictions, including Jersey and Guernsey, want to introduce the tax to crack down on 'profit shifting'.
This is where major companies move their money to lower tax jurisdictions to avoid higher taxes.
Assistant Treasury Minister Ian Gorst says the tax would affect around 5% of all Jersey-based corporations - approximately 1,400 companies overall.
He explained: "We are proposing that we'll use [the tax] to finance the hospital, but equally, we need to ensure that we remain competitive and there will be allocating money to do that as well."
The government's budget has estimated what money raised between 2026-2028 can go towards:
However, Senior Investment Director, Ben Shenton, has concerns that taxing corporations will not be in Jersey's best interests.
Mr Shenton stated: "If you're going to be paying 15% tax in Jersey - and paying a lot more as we're an expensive island for professional services - it erodes the advantages of being a tax haven.
"In the very short term, it's great as we're going to get money for the new hospital, but it's a bit like someone bringing you a gift before they set fire to your house.
"The implications could be quite dire and the government has to start thinking longer-term, rather than grabbing the money."
However, Deputy Gorst said those who fear corporations will be put off coming to Jersey have a "lack of understanding" of how the tax system is being developed.
Deputy Gorst added: "The bedrock of Jersey's economy is financial services and we need to do everything we can to ensure that it remains firm, strong, and secure.
"The whole purpose is those in-scope companies cannot avoid paying tax on their profits
"So the choice is do companies pay their tax on Jersey profits in Jersey, therefore benefiting islanders, or do they pay those profits in another country?"
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