Jersey has set out its Proposed Government Plan 2022 to 25 which has put forward recommendations to tax cannabis companies at 20 per cent.
In its proposed Proposed Government Plan 2022 to 25 the Government of Jersey has included recommendations for the implementation of taxation on medical cannabis growing and processing. The package of measures has been put forward in a bid to close the fiscal gap caused by COVID-19 uncertainty due to ongoing costs of dealing with the pandemic.
The island’s Finance Law, implemented earlier this year, introduced the power to impose regulations for the taxation of cannabis business profits.
The plan highlights that the government will be supporting the island’s rural economy through the diversification of high-yield crops such as cannabis, and states: “During 2021, the Revenue Policy Development Board (RPDB) decided that the profits made within the cannabis industry should be taxed at the rate of 20 per cent and that normal business tax principles should apply.
“Those regulations are being drafted and the intention is that they will take effect for the year of assessment 2022. The taxation of the medicinal cannabis industry is one of the measures proposed to generate additional revenues from 2024. It is not yet possible to forecast how much tax will be raised because the industry is in its early stages and any forecast would be speculative.”
To help shape the next phase of the regulated cannabis sector on the island, Jersey recently established its new Cannabis Services Advisory Board to act as an official conduit between industry and government.
Nicholas Morland, chair of the Jersey Cannabis Services Advisory Board and CEO of Tenacious Labs, said: “We welcome the Government of Jersey’s decision to introduce a 20 per cent rate of corporation tax for businesses operating in the sector.
“What the sector needed was clarity; it needed to know what the parameters to operating in Jersey were, and that’s exactly what we now have. Jersey has a fantastic opportunity to cement itself as one of Europe’s leading cannabis hubs, where consumers and businesses alike understand the provenance of products grown here.
“I hope this move inspires more emerging companies in the cannabinoid space to move to the island.”