Speaking at another of the company’s seminars on the overview of the zero-10 proposals, Mr Mancini said that while he still agreed the strategy was the best decision, he feared its implementation.
‘It’s great for international business but my concern is for local business and the way it is implemented because they have now got uncertainty and a fairly cumbersome compliance regime and possibly the most draconian anti-avoidance measures in the world.’
He said the amendment to section 67 of the current law could now implicate every transaction that took place if the tax office saw fit.
Although a statement of practice is being prepared which should make it clear which events would not be considered as constituting legal avoidance, Mr Mancini doubts if one would have been needed if the current law had been retained.
‘There was nothing wrong with the old section 67. It was already enough of a deterrent.
‘The tax office has now got too much power. We need good law rather than a bad law with a good statement of practice.’
KPMG senior tax manager Fiona Le Poidevin said companies would have to pay particular attention to new compliance measures.
‘Reporting restrictions are a lot stricter than they were before. These changes put more responsibility on businesses, even if the liability of taxes has reduced.’
Mr Mancini said that it was a worry that the business community in Guernsey was still waiting for a large proportion of the legislation.
‘In an ideal world we wouldn’t be where we are now, but zero-10 is the right strategy.’
KPMG executive director John Riva from Jersey said it would be a challenging time for both islands and that mistakes were likely following the introduction of new legislation.
‘It’s very much suck and see and what we have now is possibly going to change in a couple of years’ time.’