Ian Kelly Denies That Corporate Taxes Will Be Replaced With High Fees In IOM

by Jason Gorringe, Tax-News.com, London

25 July 2002

Speaking at a recent lunch co-hosted by the Association of Corporate Service Providers (ACSP) and Barclays, the Isle of Man's Assessor of Income Tax, Ian Kelly attempted to reassure the jurisdiction's business and finance sectors that the shortfall created by the planned zero rate of corporate income tax will not be offset by vast increases in the fees that Manx-based companies will be expected to pay.

Reporting on last week's lunch, held at the Hilton Hotel, the Isle of Man Online news service quoted Mr Kelly as stating that: 'I stress, (there is) no intention to see a replacement tax by way of a fee structure.'

Responding to a question from the audience, the Income Tax Assessor revealed that the Island's authorities would be looking at 'imaginative ways' to bridge the gap created by the effective removal of corporate tax, explaining that:

'There is a gap of £20-23 million and the only way you can fill it it is by generating more business or by cutting back on expenditure, or if not cutting back on expenditure, at least not having the same rate of growth on expenditure, which has been reasonably high.'

Although Mr Kelly admitted that the possibility of imposing some sort of fee or charge on the Island's 35,000 incorporated companies has been discussed, he was keen to reassure those attending the ACSP lunch that this would not end up being equivalent to a corporate tax.

'You may be looking at something around £200-£400. That's the sort of fee we are talking about. Not thousands. And that applies equally to insurance companies,' he explained.

The IoM Online reported that the Assessor of Income Tax promised to consult with various industry sectors over the next couple of months in order to gather feedback and suggestions.

'We have four budgets in which to do it (introduce a zero tax rate, but) I would think that realistically we've probably got 18 months in which to sort this out,' he revealed.

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