Isle of Man Budget 2016: Thousands miss out on tax cuts

Treasury Minister Eddie Teare said while job vacancy figures on the Isle of Man have not recovered since 2008 prior to the banking crisis, average earnings are up about 2%

Thousands of minimum-wage workers on the Isle of Man are to miss out on tax cuts outlined in last year's budget, the Manx government has announced.

In the budget for 2016/17, treasury minister, Eddie Teare said plans to abolish income tax for 10,000 will not be as far reaching as expected.

Instead of increasing the personal income tax allowance to £14,000, it has been increased by £1,000 to £10,500

Instead of affecting 10,000 people, the new plans remove 2,000 from tax.

Mr Teare added: "I appreciate that this is not the level of allowance that I had hoped [last year] but given the current financial situation this is the most that can be achieved.

"I remain convinced that this is the right way to go in the future but currently, it is unaffordable".

The total Isle of Man budget for 2016/17 is estimated at £955.6m, an increase of 1.5% on last year.

Other budget plans for the coming year include a new £50m Enterprise Development Scheme to help create jobs and encourage private sector investment.

'Resilient economy'

The government said the project will provide training opportunities to fuel the recruitment needs of engineering, manufacturing and technology firms.

Work permit reforms are also expected to make it easier for companies to bring in skilled workers from off-island.

The basic state pension is also expected to rise by 2.9% (£3.35 per week) while virtually all other benefits have been frozen.

A Storm Damage Risk Contingency has also been established after extensive flood damage on the island over the past few years.

Mr Teare said: "The Manx economy continues to be one of the fastest growing in Europe - we are enjoying our 33rd year of unbroken growth.

"We are resilient and well placed for continued growth".