Two-year tax strategy gets Tynwald support

The document outlines a plan until 2026 when there will be a general election

A two-year strategy designed to meet the Isle of Man's income targets while keeping the "tax burden" as "low as reasonable" has been given the backing of Tynwald members.

Treasury Minister Alex Allison put forward the document, which contains three strategic objectives and seven "priority actions", ahead of April's 2% rise in the higher rate of income tax.

While the new strategy gained broad support, some members criticised it for being a "set of principles" rather than clear plan.

Dr Allinson told politicians the document was designed cover the final two years of the current administration.

He told Tynwald the 2024-26 plan focused on three key objectives, one of which was to raise taxes to meet the island's needs "through a sustainable and diversified" system, while keeping the "tax burden" as "low as reasonable".

It also aimed to allow the island to "continue to comply with international tax standards", and remain a "responsible and reputable tax jurisdiction", he said.

'Low tax jurisdiction'

The seven priority actions within the strategy include the implementation of a "minimum effective tax rate of 15% for multinational enterprises", as previously agreed by the three crown dependencies.

The document also called for a "review" over the "scope of businesses subject to competitive rates of corporate tax", and the consideration of a new levy on income "ringfenced for the health service".

Other actions outlined included monitoring international tax standards and potential incentives to grow the working population.

During the Tynwald debate on the document, David Ashford MHK said many of actions were "already in train" and the plan was too focused on raising tax revenue "to keep existing services going".

He put forward an amendment to set up a working group in place of the plan to create a longer term strategy and present it to Tynwald by March 2025.

Several members supported that idea, including Speaker Juan Watterson, who said it was less a strategy and more a "broad set of principles".

However, the amendment was narrowly defeated, losing out by one vote in both branches.

Responding to the criticism, Dr Allinson said while he would have liked to have to presented a longer-term strategy, he had to acknowledge there would be a new administration in 2026.

A document covering a longer period would leave the next administration with "an outdated tax strategy" without taking any new changes into account, he said.

Dr Allinson said implementation would be phased "through a series of measures through the remaining term of this parliament", with an annual progress report be included in the annual departmental plan going forward.