PAG public meeting
The Tax Gap - is it fair?
A talk by Mark Solly
(former IoM Assessor of Income Tax)
7.30 p.m. Monday 19th September 2011
Manx Legion Hall, Douglas
Although most of us dislike paying our taxes there is a general acceptance that they are necessary to provide essential services from which we all benefit.
With VAT receipts reduced it may be that the next government will consider increasing income tax from the existing standard rate of 10% and the higher rate of 20%.
"A tax should be seen to be fair in its impact and, broadly speaking, a persons contribution to tax revenue should be proportionate to their income", according to the Treasury Minister.
Yet her budget decision to abandon the Attribution Regime for Individuals ( ARI) as from April 2012 may mean a reduction in tax take and further develop a two-tier tax structure which she admits was created with the introduction of a tax cap in 2006.
| < Prev | Next > |
|---|
Comments
At its meeting on 13.09.11 it endorsed the decision to abolish ARI as from April 1st next year.
Responding to the news the Treasury Minister commented: "This is a positive development for the Isle of Man. It is an endorsement of Government’s strategy of responsible engagement with international concerns while promoting the Island’s legitimate interests."
What she fails to state is that the revenue derived from the Attribution Regime for Individuals will be lost when ARI goes. In 2010-11 this was estimated at ÂŁ2.4 million.
It is revenue we can ill afford to be without.
What's more abolition may allow the wealthier in our society to shelter income in their own companies and so avoid paying income tax on it. Treasury will lose out again!
Craine - I don't think personally that it's time to raise taxes again...
Bell - If zero rate was to go or the 10% was to be enhanced in any wider way would lose a substantial part of the economy....
Watch the programme on your computer (only until 18.09.11) -
http://www.bbc.co.uk/programmes/b007tjmv
The Speaker: Madam President, notwithstanding the requirement to comply with European directives in respect of Zero-10, is there not a real danger that unless provision is made, we will be entering, in the Isle of Man, a two-tier tax structure, where the wealthy will be able to roll up income within a company and the ordinary earner will go on paying tax as before, and clearly a two-tier structure like this is going to be blatantly unfair and undesirable?
The Treasury Minister: I am not sure that I agree with the Hon. Member. I believe that we are trying hard to prevent a two-tier structure, but, obviously, we have a tax-cap situation in place at the present time which, in itself, introduces a two-tier structure.
I think what we are trying to do is to produce a fair tax regime for all the residents in the Isle of Man that will avoid the possibility of rolling up income.
Treasury Minister on Abolition of ARI
A tax should be seen to be fair in its impact and, broadly speaking, a person’s contribution to tax revenue should be proportionate to their income. An income tax cap policy has been in place for a number of years, which is founded both on the aim of developing the economy by attracting the immigration of wealthy entrepreneurs and on the principle that a person’s contribution to tax revenue can have an upper limit if it furthers other policy objectives such as economic development.
In recent years a number of changes to the Isle of Man tax system have been made with the intention of making it fairer. Further changes of this kind may be made in the future.
RSS feed for comments to this post