Zero-ten tax system 'vindicated'

Guernsey's chief minister has said the introduction of the zero-ten tax system a year ago has been "vindicated" by the current economic circumstances.

The system to charge some companies no corporation tax and others 10% tax came in to force in January 2008.

Deputy Lyndon Trott said he felt more "comfortable" with the system now than he did before its introduction.

Zero-ten aims to attract businesses to Guernsey, but there are fears it could be affected by the economic downturn.

Downturn 'difficulty'

Deputy Trott said: "Do I believe that circumstances have helped vindicate or endorse zero-ten? Absolutely.

"I'm more comfortable with it today than I was 18 months ago because of circumstances which were outside of most people's reasonable prophecy."

However, last month Treasury and Resources Minister Charles Parkinson said because zero-ten was based on economic growth it had been left in "difficulty" by the downturn.

He said the island could face a budget deficit of between £30m and £40m in the next couple of years.

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