IoM Chamber Of Commerce Warns Over Planned National Insurance Hike

by Jason Gorringe, Tax-News.com, London

21 November 2002

The Isle of Man's Chamber of Commerce has hit out at proposals to increase National Insurance contributions for employers and the self-employed on the Island from April, arguing that the increased tax burden will lessen the jurisdiction's attractiveness for international firms.

Speaking to the Isle of Man Online news service following Health and Social Secretary, Clare Christian's recent announcement, CoC president, Don Lindsay observed that: 'No matter which way you look at it, it is a tax on jobs, and totally inequitable since it is a tax irrespective of the underlying profitability of the business concerned.'

He added that the planned NI increase somewhat undermines the impact of the government's decision to introduce a zero rate of corporate taxation in order to increase competitiveness.

'What message is the government sending out?' he asked. 'On the one hand it is saying that it will reduce or eliminate corporate tax but on the other hand it still intends to increase revenue from businesses in other ways. The corporate world will view the zero tax strategy with some measure of cynicism in the light of this announcement, and understandably so.'

Questioning exactly when the need for increased social funding arose - given that no mention was made of the need for an increase in NI contributions in last year's budget, Mr Lindsay concluded:

'The chamber fully suppports a first class health service for the people of the Isle of Man. This is obviously in the best interests of the business community and accordingly there is an argument that the business community has a part to play in ensuring that this is achieved. However, if these proposals go through, there will be an impact on business and this needs to be understood.'

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