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Business

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The GSD’s business policy, like its general economic policy, is to create and sustain a general climate of stability in which local business acumen and effort can prosper. We are acutely aware that, given the cross border economy, competitiveness is a key factor for business. Key to this are the number of visitors to Gibraltar, the Government’s efforts to keep business overhead costs as low as possible and business taxation.

Gibraltar’s small size causes unavoidable diseconomies of scale for local businesses. It does the same to Government in respect of public services so the per head costs of public services in Gibraltar is necessarily much higher in Gibraltar than elsewhere, which results in higher utility and other fixed overhead costs. Nevertheless the GSD Government’s policy has been, and continues to be to do all that it reasonable can, within its policy of maintaining stable public finances, to keep increases in these costs to a minimum, and to reduce them where possible.

While businesses understandably lament all cost increases, the GSD’s policies have on the whole been successful: Gibraltar receives record numbers of visitors; corporation tax has fallen greatly; import duties have been cut heavily on many goods; social insurance contribution increases have been kept to below inflation; electricity and water charges are heavily subsidised; political and economic stability has been greatly enhanced; and a variety of other measures have been introduced to help business.

This has been done in a variety of ways, some of which are not always recognised:

• • Company tax reduced from 35% to 10% (preceded by 20% small company rate);

• • An end to previous practice of 10% per annum increases in social insurance contribution rates and replaced by periodic increases which have not even kept up with inflation during the period;

• • Electricity and water prices highly subsidised to insulate business from real cost;

• • Import duty halved on many goods and reduced to zero on many others;

• • Early Payment of Rates have a discount;

• • Building of industrial parks to provide affordable business premises;

• • Reduced social insurance contributions for casual, part time and temporary workers;

• • PAYE and social insurance collection unified;

• • Computers and commercial vehicles exempted from import duty;

• • Wage subsidy and training schemes;

• • Extra tax relief for new business facades;

• • Government takes over liability for maternity and paternity pay;

• • Telecoms liberalisation, leading to improved service and lower prices;

• • Street beautification and pedestrianisation programmes (at Government expense) to create better business environment;

• • New commercial units provided at Casemates Square, Waterport , Chatham Counterguard and new industrial units at Waterport and Lathbury Barracks;

• • Heavy investment in Port infrastructure and growth in port visits, bunkering and cruising;

• • Successful repositioning and development of our finance centre and its reputation, and huge but careful growth in online gaming industry leading to increased activity in other sectors of the economy;